Tenant retention measures the number of tenants that rent your real estate investment for consecutive periods. As the word implies, it shows you how many renters you’ve retained. As a real estate investor, you should aim for tenant retention, not tenant turnover.
Importance of Tenant Retention
What does the tenant retention rate imply, anyway? To appreciate tenant retention, it’s important to understand why tenant turnover can lower your rental property’s profits.
- If your South Florida rental property is vacant, you won’t be able to collect rent. This can cause your pocketbook to be blank.
- Every time there’s tenant turnover (i.e. a tenant moves out), you will have to pay for repairs, maintenance, and more to make it “rent-ready”. This can be time-consuming, and not to mention costly.
- Every time a tenant moves out, you’ll have to screen tenants a second time around. This can be costly, as the process can cost around $25 to $75 for each tenant. It’d be better to retain a tenant than to find a replacement.
The answer to these is tenant retention.
When you retain tenants, you can benefit from having a rental unit that isn’t vacant. You can continue to collect rent and earn rental income. Plus, an occupied property is far safer than an unoccupied one. Your tenant will be able to deter would-be burglars, and if they’re responsible, they can ensure that it’s in proper condition year-long.
How Can You Improve Tenant Retention?
If you know how to manage a multi family property properly, you can improve tenant retention. Ultimately, whether or not your tenants stay is up to them. There are, however, certain things you can do to encourage them to rent the unit for a longer time. We’ve outlined the ways you can lower your South Florida property’s turnover rate, and raise the retention rate.
#1 Communicate With Tenants
Tenants aren’t the most patient people. While there’s no rule on how fast you need to respond to tenants, it would be best to respond to their concerns as soon as possible. With that said, you should maintain multiple modes of communication, such as email, call, SMS, and so on. Furthermore, your tenant should know that they can contact you at any time – this will make them feel more comfortable about their situation. They know that they can count on you, whatever comes their way.
Here are a couple of tips on tenant communication:
- Reply to your tenant’s message (e.g. “this is noted”) even if you’ll have to deal with it later in the day.
- Use a tenant portal to monitor real-time communication. Your tenants can also use the portal to report repairs, concerns, and so on.
- Be sure your tenants have your property management company’s number saved on their mobile phones. That way, in case you’re busy, their concerns will still be attended to by your property management agent.
#2 Ensure the Unit is Rent-Ready
No tenant wants to move into a property that’s not “rent-ready”. These are properties that haven’t been repaired and show signs of damage done by the previous tenant. To get off on the right foot, guarantee your tenants that the unit is rent-ready. That way, they can actually move in when it’s move-in day.
You could also go the extra mile by extending help to your tenant. For example, you could help them coordinate their moving vans, or connect them with a long-distance moving service that you can vet. You could also give them vouchers to a popular restaurant as a token to mark their move-in day.
#3 Provide Unparalleled Amenities
Want your tenants to stay? The answer is to provide appliances, electronics, etc. that they haven’t seen in any other rental property. For instance, if apartments in the market don’t come with an in-unit washer and dryer, make sure to install one in your unit. That way, your tenants won’t have to run to the nearest laundromat every laundry day. They will be more willing to renew their rent and pay a premium price for the way of life that you offer.
The key is to provide what other rental properties don’t have. For example, if fellow investors of multi-family properties don’t provide Wi-Fi, it would be wise to beat them to it. Ask your property management agent to determine what today’s tenants want. Do they want energy-saving upgrades? What property improvements would result in the ideal return on investment (ROI)?
#4 Stay on Top of Repairs
Two of the costs you’ll inevitably incur when you invest in a multi-family property are all about repairs and maintenance. These are non-negotiable parts of property management as not only do they protect your property, but they also secure your tenants’ satisfaction.
If your tenant reports repairs, call your contractor, electrician, etc. ASAP. Tenants don’t want to wait days for repairs. If you don’t attend to the most minor maintenance tasks, you will likely lose your tenants. For that reason, it would be beneficial to partner up with a professional property management firm. They can handle all repair-related concerns. You won’t have to deal with tenant calls in the middle of the evening or at any time during the day!
#5 Plan Events For Everyone
Plan parties, cookouts, and more to make the community feel more close-knit. If people feel connected, they will want to renew their rental contracts. This is because they’ve built relationships with tenants whom they don’t want to leave. They are aware that by moving out, they’ll also have to bid goodbye to their neighbors.
If you’ve hired a property management company, ask them if they can plan events like karaoke nights, pool parties, or weekend cookouts. Make sure that there’s an event for everyone – for instance, a painting party for the kids, and a game night for the grown-ups.
The Bottom Line
If you’ve noticed, there is one common aspect across all of the tips we’ve outlined – they’re all tenant-centric. As you can see, the key to tenant retention is to keep your tenants satisfied with their way of life. If you give them something that they can’t give up, they won’t want to move out every time their lease comes to a close.
At Luxury Property Care, our experts are trained to meet your tenant’s needs. Partner with us to receive full-service property management for your South Florida rental property. Get in touch today and call (561) 944 – 2992 or complete our contact form for more information.
