Did you know about 44 million housing units were occupied by renters in the U.S. last year?
Finding good tenants is hard work. It involves advertising vacancies in the right places, charging competitive rental rates, conducting thorough background checks, and doing other things. One source notes that the average time a U.S. renter in a multi-family building stays is just over 27 months. If you do your homework and find good tenants, you’ll want them to stay longer than that. Vacant units mean you’ll have to go through the costly process of finding new tenants.
A thorough screening process can spare you the headaches that come with accepting bad tenants who don’t pay on time, don’t pay at all, or cause you all sorts of problems. And if you have tenants who don’t pay their rent, you’ll still have to honor mortgage payments, repair bills, and property taxes. So, finding good tenants and holding on to them for the long haul is critical.
But how do you do so? Keep reading for some tips on finding and keeping quality tenants.
You need to understand property values and rental rates in the area. After researching other comparable rental units in the community, you’ll be able to set competitive rates for your residential properties. Tenants are looking for good deals and won’t stick around if you implement sharp rent increases.
Do you have good tenants whose rental agreements are soon to expire? If you want to encourage them to renew their leases, consider keeping rent as is or, if the market dynamics justify an increase, bumping up rent a nominal amount. Don’t dismiss the possibility of a rent cut if you have good tenants with worsened financial situations. It might be better to keep them around at slightly lower rents than to try to replace them.
You’ll want to prioritize timely property maintenance and repairs. Quality tenants want their rental units to be in good repair and want the grounds to be cared for. If their needs aren’t met, they’ll look for more suitable rental units after their leases are over. If you’re busy and need help staying on top of things, hire a property management company that can handle day-to-day operations. When you find the right service provider, you won’t have to worry about a thing. You can choose which functions you want to outsource and which duties you’d rather do yourself.
It’s also essential to place a premium on effective two-way communication. Don’t wait until a tenant’s lease is almost up to take notice and roll out the red carpet. Good customer service should be a part of your business plan. It will help if you are responsive when tenants get in touch and share concerns. Be friendly, courteous, and professional.
Hiring a property manager will help since the service provider can be the go-to source for tenants. You might find it challenging to be on call when you have many other things on your plate. So, outsourcing customer relations to a property manager will ensure your tenants’ needs are met. That doesn’t mean you have to be an absentee property owner. But it will ensure your tenants get faster service whenever they have problems or need help.
You also need to ensure your units are relevant. What do your tenants want? An upgrade might be in order if your rental units are carpeted while other properties in the area have hardwood or laminate flooring. What about the fixtures and appliances in your rental units? Do they look up-to-date and relevant compared to other rental unit options in the area?
If you do an honest appraisal, you might realize that you’re charging too much or not charging enough. This is another area where a property manager can come in handy. The service provider can give you constructive feedback to help you appeal to quality tenants. If tenants are nearing the end of their leases and know that similarly priced units elsewhere are better equipped, they’ll be out the door for homes or apartments with better amenities and features.
Another way you can keep good tenants longer is by offering flexible leases. If you usually ask tenants to sign two-year leases and the time comes for them to resign another lease, consider offering shorter ones if good tenants have legitimate reasons for wanting shorter leases. Do you own more than one residential rental property? Maybe another unit within your portfolio would better fit current tenants thinking of going elsewhere. If so, make it easier for tenants to switch units. Otherwise, they might simply rent from another landlord.
Don’t wait until the last minute to approach tenants about lease renewals. Do it early. You might, for example, follow up three months before lease expirations to get good tenants to renew. Offer incentives for renewing sooner rather than later. If you have quality rental units, charge fair rents, and offer incentives for renewal, the odds are on your side that good tenants will stay put. That way, you won’t have vacant units that bring in zero monthly rent.
It’s also a good idea to check in routinely. Find out how things are going with tenants and encourage them to reach out if there’s anything that you can do to make things easier for them. One way to solicit feedback is to send out occasional surveys. Find out whether they prefer to get correspondence via mail, text, or email. Doing such things will build rapport and let tenants know they are valued and appreciated. Again, don’t wait until tenant leases are almost up to show concern for their well-being. If you prioritize checking in with tenants, seeking their feedback, and acting on their suggestions, you’ll find that more tenants are willing to stick around.
If you want help finding and retaining good tenants, one of the best things you can do is hire an experienced property manager. At Green Residential, we strive to help property owners in Austin and Houston with their property management needs.
We offer a wide range of options, from tenant screening and rent collection, repairs and maintenance, and marketing and inspections. Let us know how we can help you with your property management needs. We’re here to help.
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