Professional property management firms often stress the importance of tenant retention strategies, and for good reason. Without tenants, who are the lifeblood of your rental business, you won’t be able to grow your bottom line. This is the total opposite of your goal as a South Florida real estate investor.
In this article, we’ll explore the effects of turnover, and dive into the role of a property management firm in tenant retention.
Why does tenant retention matter?
If there’s one aspect of property management that you must focus on, it’s tenant retention. Here’s why you should strive to ensure your tenants continue to rent with you over the years.
Loss of income
The loss of tenants means the loss of income. A rental property that’s not occupied is a property that’s making you lose money with each day that passes. Even if your rental is vacant, that doesn’t mean you can hit pause on your costs, such as your utilities.
If you’ve been relying on your rental income to offset your costs—which most landlords do—you may have to pay out-of-pocket. If you don’t find a replacement tenant fast, you may run out of money and be forced to put an end to your rental business.
Greater marketing costs
If you lose tenants yearly, that means you must also market your rental yearly. Considering that it can cost thousands to do this (considering listing costs, printing, professional photography, etc.), that’s a lot of wasted money that you could’ve used elsewhere. It would be more cost-efficient to have to market your rental property only once.
Replacing tenants is time-consuming
Finding new tenants will take time, as it’s crucial to make sure that they meet your criteria. If you were to say “yes” to the first tenant you find, there’s a risk that they’re not suitable, and you’ll have to repeat the whole process in a year. It would be more time-efficient to secure good tenants from the get-go and do what you can to ensure their satisfaction. That way, you can spend your time on more productive tasks, like looking into new markets and improving the property.
Cost to prepare the property for new renters
You can’t expect new tenants to move in immediately. Even if your past tenants left the property in decent condition, in most cases, it will still need a few minor touch-ups, such as wall repainting. This can cost you thousands of dollars, which is something you wouldn’t have to shell out if you had focused on tenant satisfaction.
How can property managers help with tenant retention?
To protect your bottom line, you may want to consider partnering with a property management company. These professionals offer a wide range of services that will improve your tenant retention rates, such as:
Promptly responding to maintenance and repairs
For most—if not all—tenants, it can be a massive deal breaker when their issues aren’t resolved in a timely manner. This is understandable—after all, would you want to live in a rental property where the owner doesn’t provide a swift response to your repair-related concerns? Probably not.
No matter the magnitude of the issue, a property management company will ensure that it’s dealt with promptly. They’re able to do this because they use portals that allow tenants to directly contact their team, file requests, and monitor the status of their requests in real time. This makes sure that no issues are overlooked, demonstrating the company’s genuine concern and commitment to their tenant’s safety and satisfaction.
Openly accepting feedback
A good property management company will know that there’s always room to grow. And who better to ask feedback from than the clients whom they serve?
When a tenant complains, a good property manager won’t point fingers or blame it on the tenant, but instead, try to do better. For example, if someone says that the current communication channels are inconvenient, the property manager will strive to find other channels. To them, feedback isn’t bad—it’s valuable.
When tenants can see that their property management company is actively looking for ways to do better, whether in terms of their rent collection methods, communication channels, etc. they’ll feel more valued.
This shows them that their company doesn’t view them solely as an opportunity to make money, but that they’re willing to meet their needs and demands. It creates a sense of loyalty and entices them to renew their rental contracts year after year.
Providing property improvements
One of the basic responsibilities of a professional property management firm is to provide its clients with a safe and habitable home. However, a great property manager will go beyond this by providing various property improvements over the years.
They’ll work closely with their tenants to make sure that the property continues to meet their needs, whether in terms of comfort, security, style, or other factors. They understand that tenants may have frustrations about not being able to modify the home themselves, so to compromise, they’ll try to meet their tenant’s wants. While property improvements are an additional expense, property managers are aware that they’re investments.
Forming genuine relationships with tenants
If you fail to build a bond with tenants, they’ll be less likely to renew. This isn’t to say that you should be best friends, but it will mean a lot to them if you checked in with them once in a while, greeted them on their birthday, or offered small gestures of appreciation.
A property management company understands the importance of landlord-tenant relationships. Because of this, they’ll make sure to carry out the necessary steps to show their tenants how much they’re valued.
Ensure tenant satisfaction with professional property management
You’d be able to save yourself from a lot of trouble (and money) if you were to invest time and attention in tenant retention. By partnering with Luxury Property Care, you’ll benefit from our years’ worth of expertise in tenant retention, allowing you to ensure your tenants’ satisfaction. Furthermore, you’ll be able to establish a loyal tenant base and secure the success of your rental business for years to come.