Your current tenants are the biggest asset you have! You could throw a lot of money into advertising and marketing and repairs for new tenants that will replace the ones that are moving out OR you could influence them stay!
If you’re an investor or property manager, these 6 tips will help you stay on top of your game and help make your good tenants stay!
Local Retailer Discounts
Fast, Effective Maintenance Service
One great way to entice your tenants to stay for the long term is to provide them some incentives. Discounts at local retailers are a great place to start! Call or visit some brick and mortar stores in your area and talk with the manager on duty. Let them know how many tenants you currently have and that you want to help steer them toward that business.
Most business owners are happy to give a 5-8% discount for their products or services when they know they’re appealing to a larger number of people. Even if you don’t have 100 properties that you’re managing, getting in contact with them is still a great idea. Local businesses are always looking for support and you never know who will agree to work with you!
Once you have a couple, create one page on your web site that outlines all of the vendors who are providing discounts and send that link to your tenants! Keep the URL simple and easy to remember (e.g. www.abcpropertymanagement.com/discounts). You want your tenants to take full advantage of these incentives because that makes them feel like they’re getting more value when renting from you!
You may need to work out some way for companies to verify who is your tenant. If you own an apartment community it can be as easy as having them change their driver’s license address and passing the street names on to that business. You can also purchase cost-effective “live strong” bracelets with your company name on them, which your tenants can wear to that business.
Here are a few company types to get you started:
- Movie Theaters
- Restaurants (Locally owned is best)
- Bowling Alley
- Amusement Parks
- Coffee Shops
- Breweries
- Bars
Be creative with the companies you choose! Don’t forget to talk with your tenants as well! That’s the best way to find out what discounts would add the most value to their lives. They’ll appreciate you going above and beyond for them!
This is probably the single most important way to influence good tenants to continue renting your property. Everyone has maintenance issues come up from time to time and it can be downright annoying, especially when you don’t know how to fix it yourself. What’s even worse is when you put in a maintenance work order and no one responds for several days or weeks!
Make sure that you have a system in place where tenants can enter work orders on your website. You, or your employee, need to make sure you review all maintenance requests daily, whenever possible. Speaking of which, if there are days that you do not handle maintenance requests, make sure it’s very apparent to your tenant. Let them know when they move in that unless it’s an emergency, you will respond to a maintenance request put in on Saturday on Monday morning.
On your website, create a page that illustrates exactly what maintenance requests qualify as an emergency. Be specific when you’re writing them up! One example of an emergency maintenance work order here in North Carolina is if the Air Conditioning goes off and the outside temperature is above 86°. The specifics of emergencies may vary by area, but some (clogged toilet or fires) are relatively universal.
Make sure that the “right of entry” for maintenance technicians is in your lease and that a key is readily available for technicians to pick up. That’s going to allow them to respond to your tenant’s work order more quickly, which is crucial. If the key is in a shoebox filled with other keys, it’ll make things very difficult. Also, be sure to label all of your keys! There’s nothing more absurd than having keys lying around and you’re the only one who knows what they’re for. That will waste a lot of your maintenance worker’s time, inconvenience your tenant, and possibly cost you that tenant in the long run.
Some tenants are pickier about when they want someone in their house and would prefer that they be home when a maintenance worker comes by. Make sure they realize that to better serve them, technicians need the ability to enter the home and complete the work promptly. While you’ll do your best to accommodate them, the work needs to get done and you’ll do what you have to and make sure it gets completed. While some tenants may get irritated about this, most will have no issue.
If you run into one o those tenants that protest and give your maintenance crew the run-around, it may be in your best interest to part ways with that tenant when the lease-up and assist them in finding other accommodations. While finding them another place to live is extra work on your part, it shows a lot of professionalism and that makes a huge impact on the type of tenants you attract and which ones you keep.
Community Events
Getting people engaged is a fantastic way to keep good tenants in place! They don’t need to be expensive. Put together something that gets your tenants together and communicating. This is especially crucial if you own a larger apartment community where they’re all living in the same area. Cookouts, wine and cheese events (BYOB, of course), and block parties with music are excellent ways to go. You can do a “Taco Tuesdays” or similar events that require more work but make sure you’re utilizing your time effectively.
Renewal Incentives
Lease renewal incentives are a fantastic way to make good tenants stay because they provide three big benefits if you use them correctly! Your tenants renew for another year, you may be able to raise rents AND you can increase the rental value of your property!
Some owners prefer to allow the tenant to rent month to month after the lease is up, but there’s so much hidden potential with renewals I just can’t understand why! Remember. Before your tenant gets an incentive, they have to sign a renewal for the next year.
Unit Upgrades
Unit upgrades are a big hit with tenants! Who wouldn’t want their home to be improved, as far as they’re concerned, for free! When I say “upgrades” what I mean is making small, cost-effective additions to your property that improve its aesthetics or functionality. Two things that can have a positive effect on your rental value!
Keep in mind that you don’t want to break the bank or do a complete renovation. Adding a ceiling fan to a bedroom that just has a light fixture or changing the doorknobs throughout the home are two simple, cost-effective things you can do that will add value to your tenants’ life and your property. As a side note, I recommend staying away from incentives like televisions, iPods, and all that other good stuff. The best incentives, as mentioned earlier, add value to both your tenants’ life and your rental value.
Unit Upgrades are best used in combination with rent increases. What you’re saying to your tenant is, “Yes, you’ll be paying an additional $15/month, but you’ll get a brand new a ceiling fan in your master bedroom!” Check out our article on bathroom upgrades to get more upgrade ideas!
Renew Years Eve Party
Remember the last time you were invited to an exclusive party or gathering? It felt great, right? It makes you feel like the person inviting you values your company and wants to spend time with you and other people you may relate to. Tenants love this feeling too! Enter the Renew Years Eve Party!
Let me make this clear from the get-go. You don’t need to wait until your tenant’s lease is almost up before you ask them to renew. That being the case, make sure the only people who attend this party have renewed for another year and signed the lease! Keep a few more leases on hand for the tenants that decide to “drop-in” and renew on the spot!
Keep the party simple and fun. Grill out or provide catering from a local restaurant. Play fun guitar songs and maybe have a few games spread throughout the venue. You can even do door prizes and have a local band play! The sky is the limit, but always make sure you’re staying true to your budget. Events like this can be a big “money suck” so be objective when you’re decorating and hosting the party.
Conduct Regular Inspections
Conducting regular inspections is a great practice that is often overlooked. It provides two main benefits:
- It reminds your tenant to take care of your property (because you’re watching…)
- It shows them you care about their concerns
When you’re walking your property, we recommend at least twice each year, have a conversation with your tenant, and get to know them. Ask them about work and their family. Just make a conversation.
During that conversation, ask about any concerns they may have. This could be maintenance concerns that haven’t been put in and what’s happening in the neighborhood. If they have a maintenance concern, ask them to show you and review it together. Create a plan on the spot for how you’re going to handle that issue and ask them to remind you in a day or so. This will keep them engaged, improve their impression of you as a professional, and ultimately influence them to stay.
Don’t Jack Up The Rent
We all want to make sure that we’re as close to market rent as soon as possible. That maximizes our profit margins and keeps us in the game! But if there’s already a tenant in your property, and they want to renew for another year, make sure you don’t scare them away by increasing the rent by a large amount.
Increasing rent needs to be methodical and not come out of nowhere. When your tenant moves in, keep them on the up and up. Let them know that rents tend to increase over time, but you’ll do your best to price them out of the market.
Send a letter to your tenant a month or two before renewal to let them know about the increase and tell them why it’s increasing. Going up by $5 to $20 per month should be fine, but any more than that and you may be getting close to pricing them out.
It’s best to pair a rent increase with a unit upgrade, mentioned above. Let’s say you’re raising your rent by $15/m for the next year since market rents are at that level. That’s going to mean a total increase of $180 for that year. Take $50 of that money and entice them with an upgrade. That leaves you with a net rent increase of $10.83/month.
Alternatively, if you want them to move out, for whatever reason, increasing the rent by a substantial margin is a good way to do it.
These are just a handful of ways to make good tenants stay and continue renting your properties. Remember, it costs a lot more to find a new tenant than keep the current one. Put these 6 steps into action today and keep those rents rolling in!
