Tenant Retention Strategies

For a landlord, determining how to keep tenants longer can be much like nailing jello to the wall. After all, apartment-renters are by nature a transient population. In many cases, that's why they're renting and not buying. They want flexibility, the ability to move or buy when the time is right.

From the landlord's perspective, it's obviously better to have all units occupied all the time. Vacancies mean lost income while frequent tenant turnover can mean big expenses for repairs and re-painting. And a new tenant, when you get one, is not a sure bet in terms of timely payments or respect for the property.

Strategy #5 - Tenant Retention Strategies.

So how do individual landlords and management companies improve tenant retention? It's not easy, especially in markets where there are more units than demand.

Pricing

Given comparable units, it's sometimes best to price rents somewhat below the market, say $25 a month. At first this may seem like an annual loss of $300, but if it means renting sooner or fewer vacancies, such lost income is really a marketing cost well spent.

Incentives

Structure the lease so that the last month is free or half-price. The attraction of this benefit is that it only kicks-in when tenants complete their lease, a fair deal for everyone.

Use Tenant Marketing

In some cases current tenants have friends, co-workers, relatives, and others who might be good rental candidates. Be sure to tell current tenants when units are likely to be available.

Be a Good Landlord

Landlord/tenant relations need not be the real estate equivalent of war. Tenants must meet certain expectations and so should owners. In particular, properties should be well maintained, repairs should be made promptly and tenant concerns should be heard. The benefit: a better rent roll and a more valuable property.

Reach Out

A range of institutions have ongoing needs for rental properties--military bases, universities, hospitals and big corporations are all likely to have housing offices. Speak with housing officials. They can advise you regarding the requirements to be listed on their system and pricing information.

Survey Tenants

Every six months ask tenants to evaluate the property. Ask about matters such as cleanliness, maintenance, exterior areas, amenities, noise, parking and management.

Communicate

Communication can increase resident satisfaction. A newsletter, for example, can keep everyone informed regarding the property, community events and resident news. It's also a good place to announce improvements. A community bulletin board can also have value. Newsletters and bulletin boards can announce community events such as cook-outs and parties.

Fair Notice

If you're going to raise rates, then give tenants adequate notice--as much in advance as possible. Where applicable, rent control laws may have minimal notification requirements, but landlords are not prevented from giving notice well in advance of statutory requirements.

The nature of the landlord-tenant relationships is often one of complaints and disputes--but it doesn't have to be this way. Landlords can do their part, and the result can be increased retention rates, fewer vacancies and greater property values.

Look for tomorrow's Strategy #6 - Five Keys to Successful Negotiation. You are going to like this one! This is the last article in the series.

We certainly hope you enjoyed this report. Please feel free to forward it to anybody who might benefit from the information.