One of many things that contribute to a successful investment in residential investment properties is tenant retention. Your tenants are paying a lot of money to reside in your rental property and you want to keep them as long as possible! Many costs involved with owning investment properties incur at move out so the longer you keep your tenants the better your cash flow will be! I have outlined a few things below to assist in retaining tenants.
1.) Don’t chase market rents! Although it seems like the right thing to do, constantly changing your rents to chase markets up and down will result in lower occupancy. If you have a good tenant you should reward them by maintaining the rent and keeping them happy. If getting an extra 25 or 50 dollars a month is more important to you than keeping tenants long term, owning a rental property may or may not be the best investment for you.
2.) Be Responsive! Since your tenants are paying you to live in a home and you have agreed to do certain things as a landlord which is outlined in the lease you need to be punctual and have open communication with your tenants. If your tenants feel comfortable with you as a landlord they are more likely to stay when the lease comes up for renewal.
3.) Complete maintenance as needed! This is very important! There will be minor and major repairs needed at your rental property throughout the term of the lease. It’s imperative you respond quickly to all maintenance items brought to your attention by your tenants. If you ignore, postpone, or forget about items that are concerns to the tenants they likely will not renew.
4.) Explain the lease terms prior to move in! Setting expectations right from the start is a good way to avoid confusion and conflict later on. Make sure you encourage the tenant to ask questions about the lease prior to signing so any concerns can be addressed in advance.
5.) Appreciate your tenants! The folks living in your home are either paying your mortgage or adding to your retirement portfolio. You should express to your tenants that you appreciate their tenancy and you would like to keep them long term. Many tenants are willing to stay for multiple lease renewals if the relationship with their landlord is professional, courteous, and mutually beneficial for the landlord and tenant.