Tenant Retention: 3 Reasons Why It's Important And 3 Strategies To Do It

When my youngest child moved out, I was left living in a large home by myself. Weekend visits from the grandchildren only filled the space part of the time. The home became more of a burden as each day passed. It was not until I was working with my real estate agent to sell my home and find a smaller home did I realize that there were so many others in the same position. I created this blog to help other empty nesters explore their options for downsizing and to provide guidance on finding a new home that fits in more with their lifestyle.

Tenant Retention: 3 Reasons Why It's Important And 3 Strategies To Do It

Tenant Retention: 3 Reasons Why It's Important And 3 Strategies To Do It

12 August 2015
 Categories:
Real Estate, Blog


As a property manager, there is never a bad time to retain your tenants. Well, unless they are vandalizing your property in some way, then they need to be kicked to the curb. Otherwise, you want to minimize the number of tenants moving out of your properties for a number of reasons. Read on to learn more about why you want to keep your tenants happy and how you can do so.

3 Reasons You Need to Try to Retain Your Tenants

  1. Empty Units Are Costing You – When you have an empty unit, you are losing money. Sure, you may have a cash reserve, but the longer that unit stays empty, the quicker that reserve is going to chip away with the mortgage payment, lawn service, maintenance, taxes, etc. After all, it could take months to find a new tenant.

  2. Turnover Can Be Expensive – When one tenant leaves, you must make effort to get a new one. This usually comes with a number of monetary expenses, including advertising, repairs, new carpeting, new paint, new flooring, tenant screening and more (including the cost of the empty unit as discussed in #1).

  3. You May Suffer from Reduced Rental Prices – Although you will set the price for your rentals, it doesn't mean that the price won't suffer. When there are people constantly moving in and out of your building, it looks bad to prospective new tenants. They may use this to their advantage when they come in to try to get a lower rental rate. Alternatively, the value of your property simply declines because potential future residents assume no one wants to live in the property and won't even come in. Stability leads to desirability, which then leads to higher rental rates.

3 Strategies to Implement to Keep Your Tenants Around

  1. Offer Free Gifts When They Move In – When tenants move in, make them feel welcome with a welcome basket of bathroom goods or kitchen utensils. You could even throw in a gift card to a local restaurant or business. You could also offer a small gift, such as a DVD player. Although small, these gifts will show them that you are not the standard landlord.

  2. Send Out Birthday, Anniversary and Holiday Cards – Although very simple, these cards can go a long way in keeping your tenants happy and feeling wanted. You may have to pry a bit to get the date of an anniversary, but you'll have the tenant's birthday on the application.

  3. Offer Incentives and Upgrades for Paying Rent on Time – Every six months or every year, offer incentives to your tenants who have paid rent on time each month. These incentives can continue to increase as they continue to pay on time. For example, residents could choose $25 off their next month's rent, $25 property upgrade or a $25 gift card to a local business for paying rent on time for six consecutive months. After rent has been paid on time for a full year, the amount could increase to $50. Once the good behavior (rent paid on time) stops, it starts over.

No matter what it takes to keep your current tenants happy, such as a gift card to a local restaurant, free upgraded cable or a DVD player, it is usually a very worthwhile investment. You can also consider talking with other local residential property management companies, like Foreside Real Estate Management, for more information about what they do.

About Me
Home Buying Tips for Empty Nesters

When my youngest child moved out, I was left living in a large home by myself. Weekend visits from the grandchildren only filled the space part of the time. The home became more of a burden as each day passed. It was not until I was working with my real estate agent to sell my home and find a smaller home did I realize that there were so many others in the same position. I created this blog to help other empty nesters explore their options for downsizing and to provide guidance on finding a new home that fits in more with their lifestyle.

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