You probably agree almost nothing is worse than having an empty rental property. Two kinds of costs can hit hard: real costs (like utilities, taxes, maintenance, and cleaning) and opportunity costs (like lost rental income and a higher risk of crime).
In this business, we call it the “vacancy rate”. But that’s kind of an impersonal statistic. We can’t really tackle the problem until we stop thinking at the property-unit level and start thinking at the customer level – each of your individual renters who occupy your properties. Here’s a three-point plan to reduce tenant turnover.
1) Customer satisfaction.
Do you REALLY know your tenants? You should. How they found you, why they chose to rent from you, if they are satisfied with their experience, if they would recommend others to your properties.
Answers to these questions are valuable insight you can act on to learn more about who your renters are. But most importantly, it gives you the chance to understand why customers might be leaving you and if there’s anything you can do to prevent it. (there always is, by the way) It’s often because of loud or annoying neighbors, petty crime, or a slow response to maintenance needs. These are things that push your renters to the breaking point, and rightly so.
So, how do you know if your renters are satisfied? Ask them. Send out a short 5 or 10 question survey to request feedback. And when they give you feedback, share what you learn with your renters. They will appreciate your effort to know them better. Chances are, they’ve never been asked before by their landlord. And you will definitely learn something.
2) Show the value (meet customer needs).
What makes you different from every other landlord or apartment manager in the market? There has to be something, why else are you in business? Consider what your “competitive advantage” or “unique selling proposition” is. If I am looking for a place to rent, what would tell me about your rental units? Why should I consider renting with you?
To convince me to rent from you, you need to show me what sets you apart from the dozen other places I looked at this week.
But to keep me renting with you month after month, year after year, it takes more. You need to show me the value. In other words, you have to keep earning my business.
So, what are you doing to make your renters stay with you?
- Send a monthly community newsletter with helpful living tips, recipes, entertainment options, etc.
- Remind your renters of the benefits you offer: gym, swimming pool, covered parking, convenient location, mail pick-up, etc.
- Create reasons to interact and engage with your renters. Plan a seasonal party or BBQ. Organize a ping-pong or volleyball tournament. Dream up safe neighborhood activities and events for your renters’ kids.
- Think outside of the box, and you will begin to see your renters returning the favor through their continued loyalty.
3) Reward your best customers.
And speaking of loyalty, say “thank you” to your best, most long-term renters. Do something really special to make them feel important. Why? Because they are your biggest advocates. Your future growth as a landlord rests squarely on the shoulders of your best renters.
And remember how much they are worth to you. Calculate the profits you’ve made over the lifetime of each your best renters. You may be surprised to find out it’s tens of thousands of dollars.
Now imagine one of those best renters moving out. That’s a pay cut you don’t want to see! So, minimize your risk by earning the continued loyalty of your best renters.