As a real estate investor and landlord, you need stable renters to guarantee your properties continue to generate positive cash flow. One of the biggest inhibitors of this table cash flow is high tenant turnover.
How to Reduce Tenant Turnover
There will always be some tenant turnover. People switch jobs, they move out of town, their family grows, or their needs change. So, while you can never expect a tenant to stay for five or ten years, there are ways to increase the overall length of time a tenant stays in the property (on average).
Let’s take a look at several of these tactics.
1. Carefully Screen Tenants
You can reduce turnover by finding the right tenants in the first place. Good tenants are more likely to stick around, pay rent on time, and take care of your property. But how do you find them? Well, it all starts with a thorough tenant screening process.
When you’re reviewing applications, make sure to check credit scores, rental history, and references from previous landlords. You want to look for tenants who have a solid track record of paying their rent on time and staying in one place for a while. A tenant with a history of frequent moves or late payments is more likely to cause issues and move out early.
2. Maintain the Property
One of the main reasons tenants move out is dissatisfaction with the condition of the property. If there are constant maintenance issues, or the property is outdated and poorly maintained, tenants are more likely to leave in search of something better. That’s why staying on top of maintenance and repairs is crucial.
Make sure the property is in good shape before new tenants move in. Fix any issues, whether that’s leaky faucets, broken appliances, or peeling paint. Throughout the tenancy, respond to maintenance requests quickly and professionally. The sooner you address an issue, the happier your tenants will be. (No one wants to live in a place where they have to wait weeks to get something fixed.)
You should also consider doing regular check-ups on the property to catch any problems early. Seasonal maintenance, like checking the HVAC system or cleaning the gutters, can prevent bigger issues down the road. When tenants know that you care about their living conditions, it encourages them to stick around.
If you can’t do this on your own – meaning you don’t have the time or attention to detail required – this would be a scenario where it’s wise to hire a property manager to oversee property maintenance. They can also help you with rent collection, tenant screening, and most of the other things discussed in this article.
3. Keep a Positive Landlord-Tenant Relationship
The relationship between you and your tenants can play a big role in whether they decide to renew their lease or move out. If you have a positive, respectful relationship with your tenants, they’re more likely to feel comfortable staying long-term. On the flip side, if they feel ignored or mistreated, they’ll be more inclined to leave.
Make communication a priority. Be approachable and easy to reach when tenants have questions or concerns. Whether it’s by phone, email, or an online portal, having an open line of communication helps build the trust that acts as the undercurrent of a long-term relationship.
Small gestures can go a long way, too. Consider welcoming new tenants with a small move-in gift, like a box of household essentials or a local restaurant guide. You can also send out holiday greetings or thank-you notes at the end of the lease to show your appreciation. These little touches help create a sense of community and loyalty, making your tenants feel valued.
4. Offer Lease Renewal Incentives
Another great way to encourage tenants to stay is by offering incentives for lease renewals. Everyone loves a good deal, and providing a benefit for signing a new lease can make tenants think twice about moving out.
One common incentive is to offer a slight discount on rent for renewing tenants. Even a small reduction, like $50 off the monthly rent, can make a big difference. You could also offer upgrades to the property, such as new appliances, fresh paint, or updated flooring. Tenants may be more willing to stay if they know they’re getting something in return.
5. Create a Comfortable Living Environment
Focus on creating a comfortable and enjoyable living environment for your tenants. This goes beyond just maintaining the property – it’s about making the place feel like home. When tenants feel comfortable and happy in their living space, they’re much more likely to stay.
Start by making sure common areas are clean and well-maintained if you manage a multi-unit property. Adding small amenities, like secure parking, laundry facilities, or outdoor spaces, can also make a big difference. If your property is pet-friendly, consider creating a designated pet area to make life easier for tenants with furry friends.
Adding it All Up
If you can learn how to reduce tenant turnover and increase the average length of time a tenant stays in your property, you’re going to have much more success as a landlord.
Begin by using some of the tips outlined in this article, but don’t be afraid to get creative and try additional strategies. This is one area where your creativity will benefit you!
