What is the best way to maximize revenue for a rental property? One key element would be reducing vacancies. Raising rents is important, but consider that one month’s worth of vacancy equals 8% of your revenue per year. You stand to lose much more in vacancy over the long term. This sounds simple, but keeping your units full of on-time paying tenants is the best way to stabilize a rental.
Today I will talk about three strategies to make that happen.
3 Tips to Transform Your Tenants From Uninterested Residents to Lively Customers
1. Take care of issues quickly
Want to get your tenants worked up? Try taking too long to address maintenance issues. This is the fastest way to tick a tenant off and encourage them to move. Tenants want their concerns to be addressed quickly. If you can’t afford the repair at the time, be in communication with the tenant so that they feel heard.
Tenants also want to know that you are committed to keeping the property in good condition even if there is not a pressing emergency. Do preventative maintenance walkthroughs to make sure things are in good working order. If it’s a multifamily, keep the common areas in good condition. These things aren’t hard, but do take budget and scheduling. Doing them will make your good tenants feel like you care about where they live.
2. Make it feel like home
Some tenants are just renting an apartment or a house while others would call your property their home. Some tenants stay for years. They decorate for the holidays. Units are clean, and they did some things to personalize them. Maybe they repainted a room or added something to spruce the place up. Some of these tenants will never leave, as long as they are taken care of.
So how do you create that feeling of home for your tenants? It does take the right situation which is outside your control. The 25-year-old fresh out of college may not stay for 10 years and the newlyweds living in a 1-bedroom may have a baby someday. You can’t control these things, but you can create an environment that encourages people feeling comfortable enough to stay long term.
Simple strategies include doing some simple things outside of the property like basic landscaping or lighting. Allow tenants to have a pet or two, as long as they pay a non-refundable pet fee ($250) and pet rent ($25 per month).
Another strategy that works is to remove bad neighbors. If a tenant in one of our multifamily buildings is causing problems with the other tenants, address it quickly. Your tenants may not feel comfortable engaging their neighbors and will eventually move if the neighbors cause enough problems for them.
3. Reward good tenants
I make sure that my good tenants know that we are happy with them. One option is to create a rewards program for tenants who have paid their rent on time each month. Each month take the names of all tenants who paid their rent on time and enter them into a drawing. Once a quarter draw a name and give them a gift card. You can also implement a grand prize at the end of the year!
If you have several properties this is not a large investment. Tenants will get so excited about this program that they will call to make sure we got their rent on time and to check to see if they won!
If you don’t have many units, find some other way to make your tenants feel appreciated. I have heard some landlords send their tenants birthday or holiday cards. Bottom line, find a way to show them you are grateful for their good tenancy.
There are many factors to making money as a buy and hold landlord. Whether you self-manage or have a property manager, taking initiatives to keep your good tenants in place long term is the best way to keep revenue up.