The ability to find and keep great tenants can make or break any rental business. Whether you’re the landlord doing everything yourself or a property manager working with a team, attracting quality tenants is one of the most important things you can learn.
This article will walk you through some important points regarding finding and keeping good tenants. We’ve summarized the sections, so just click on any of the links below to go to a particular segment of the article.
Finding Good Tenants
Keeping Good Tenants
- Provide Incentives
- Communication is Key
- Stay Organized
- Ensure Tenant Safety
- Keep Your Properties Up to Date
Finding Tenants with Superior Value
When you’re trying to figure out what a renter wants, put yourself in their shoes. When you do, you’ll realize there are a few things they typically want in a home:
- Cleanliness – a fresh carpet, pristine landscaping, and a new coat of paint are always welcome
- Style – that snot green paint in the living room may not work in your favor!
- Safety – if the area is known petty crimes, you’ll struggle to attract great tenants
- Good schools – obviously this doesn’t apply to everyone, but it’s important to families with children
- Great condition– if the air conditioner breaks every other week in the summer, you’ll have one unhappy, sweaty tenant!
- Customer service – when your tenant calls with a question or needs help with something, how do you respond?
At the end of the day, great tenants will live (and stay) in a home where you’d also want to live. Not all of your properties have to be in tip-top shape, but it certainly doesn’t hurt.
But there’s more to getting good tenants than just having a favorable property. After all, if nobody ever hears about it, you can’t expect to rent it out very often! That’s why the next section is so important.
The Power of Marketing
Some business professionals will argue that great marketing is the most important business skill to learn. Even if a product is only mediocre in quality, or customer service isn’t great, marketing can carry a business or product to profitability.
The minimum level of marketing you should do is to verify that your property is found on various sites used by tenants to find a place to rent. A few examples are Zillow, Homes.com, and Rent.com. You can also put a sign in the property yard, and one at the entrance of the neighborhood (if applicable).
Just keep in mind that these methods are considered fairly reactive, because you’re counting on the tenants finding you. While it can work, taking a more proactive approach will help you find a good tenant faster.
Here are a few ideas to help you get started:
- Talk to colleagues in the industry- Other property managers, landlords, and realtors may know of some great potential tenants.
- Talk to friends and family- Don’t take these connections for granted. Chances are someone in your network knows someone looking for a place to rent.
- Consider paid ads– Advertising companies can help you target the exact audience you’re looking for. Whether it’s a single young professional, a family with children or empty nesters, they can help you get in front of the right people.
If you have a great property and your marketing is in place, you’ll have tenants knocking at your door in no time. The last (but perhaps most important) step is the screening process.
The Importance of Meticulous Screening
While it’s possible to kick out a bad tenant, it’s much easier to avoid having to deal with that situation. The best way to do that is to screen your tenants vigorously. At the minimum, here are a few things you should aim for:
- Credit and Background Checks- These don’t tell the entire story about someone, but it certainly tells a lot! If they have a history of not paying bills on time, you can almost guarantee it will happen again with you.
- Meet in Person- This isn’t about finding out what they look like—appearance doesn’t matter. A guy with tons of tattoos may be a perfect tenant. But you can get “vibes” from people in person that you just can’t feel over the phone.
- Look at Their Car – When you’re done showing the property, take a glance inside the potential tenant’s car. If it’s a mess, they’ll probably trash where they live- a.k.a. YOUR property!
- Talk to the Previous Landlords – Hopefully the current landlord is honest and gives you an idea of what a potential tenant is really like. Just keep in mind that if it’s a bad tenant, the landlord may say anything they can to get the tenant out of their property!
Keeping Good Tenants
Finding occupants for your property is one process, but what about keeping them? Tenant retention is not only an indication of your success as a property owner; it also shows that you’re able to respect and maintain your tenants’ safety and comfort. Beyond that, it’s within your interests to protect your bottom line and avoid vacancy cycles that could end up costing you. Here are some things to keep in mind that’ll show your residents they are valued and keep them signing your lease.
The most straightforward way to show a renter your appreciation is to provide them with perks. Offer welcome packages to new tenants and renewal gifts for those you’d like to keep. Cash and discounts are popular motivators to renew a lease among surveyed lessees, and gift cards, vouchers, and other small tokens are often welcomed incentives.
But it’s not enough to just offer them. Your timing matters. Incentives are shown to be the most effective during the first signing or toward the end of the lease. In contrast, offering incentives months into the rental term returned fewer responses and fewer lease renewals.
Another simple motivation: added amenities and space upgrades! A fresh coat of paint or new flooring perks up a tenant’s space and might just be the gesture helping them decide to stay. Outshining the aforementioned enhancements, free covered parking is the most effective and appreciated encouragement to renew a lease among those surveyed.
For apartments and townhomes, pools and gyms have become a standard fixture. However, if your complex allows pets, why not put up a dog park? This gives your tenants a way to connect with each other, enjoy time with their pups and celebrate great weather. Plus it consolidates all of the poop in one spot. Win-win-win.
How about a shared movie theater or coffee bar? Maybe some nice gas fire pits to sit around? Don’t get me wrong – I know that not all of your tenants will use these things. In fact, most won’t, even if they initially think they will. But simply by having these types of benefits you’re more likely to both attract and keep tenants.
Communication is Key
Just like in any healthy relationship, communication is crucial. This starts at the very beginning of your professional relationship with the lease term agreement for you and your tenants. It also helps prevent any potential misunderstandings, miscommunications, or tensions between you and your tenants.
Roommate debacles are also significant threats to your tenant retention, and while you are not legally obligated to involve yourself in such conflicts, you can prevent major fallouts by making sure communication is clear and encouraged. You can provide a sample roommate agreement, make sure that payment terms and violations are understood, and be upfront with how a security deposit will be handled at the end of the lease.
This is especially useful among younger tenants who may be in the first years of living independently and may still be unclear about their responsibilities as tenants and what liabilities to be aware of. Don’t assume that what is common knowledge to you is also common knowledge to your tenants.
Effective communication extends your relationship’s duration, especially if you want to keep good tenants around. You can encourage ongoing communication through weekly or monthly newsletters, welcome letters with resources and an outlining of the services you do and don’t provide, and tenant manuals full of troubleshooting tips for common complaints. Make sure that your contact information is always available, and respond promptly to their requests or complaints.
You should also go the extra mile for your tenants and give adequate notice in the event of repairs, maintenance, or any other scheduled inconvenience you’re aware of. Tenants will also appreciate their input being considered at any point, and it’s a simple way to show that you’re looking out for your residents.
Closely tied to communication, good organization bolsters tenants’ confidence in your abilities as a landlord. A primary component of being organized is simply advanced notice. Respect tenants’ time by starting the lease renewal process early. This way, no one is surprised and rushed, the process can be much more streamlined, and if your tenants decide not to renew, you have months’ head start on filling the vacancy. A reasonable time frame is to start three months before the end of the lease.
Also, schedule repairs and maintenance promptly, and bear your tenants’ preferences in mind when possible. For example, some tenants prefer scheduled repairs to occur when they aren’t home, while others prefer to be present for any repairs. Always follow up, follow through, and respond promptly.
It’s said that punctuality is the expression of commitment. Arriving on time and being aware and considerate of others’ schedules illustrates your professionalism, respect, and thoughtfulness, which your tenants will love. Inconsistency and tardiness reflect poorly on your character, business, expertise, and ability to be mindful of others’ safety and comfort and are likely to chase away good respectable tenants.
Ultimately, staying organized is the foundation of effective communication and a positive relationship with your tenants. Many renters are renting because they want to and prefer someone else to handle payment agreements, repairs, and maintenance. Therefore, it’s of tantamount importance that you protect tenants’ trust in you by maintaining professionalism and working to protect the quality of life you agreed to provide your renters.
Ensure Tenant Safety
Tenants aren’t as willing to renew a lease in a home where they feel unsafe. Especially if they rely on you to maintain their sense of security. Make sure neighborhoods are well-lit, plants and foliage are kept neat, and fences are low. If you provide parking, it is also your job to enforce parking rules and appropriately handle any violations.
Always be accessible to your tenants, respond promptly to their concerns, and remain consistent in your handling of conflicts or violations. This includes minor infractions such as noise complaints, where tenants get a full view of whether you handle conflicts fairly or conveniently. In the event of any illegal activity, you must contact appropriate legal and law enforcement officials to help handle the situation and eviction. Taking care of tenants’ safety is taking care of tenants.
Keep Your Properties Up to Date
With technological advancements making things easier for us at work or home, what used to be considered an amenity is now often seen as a necessity. For example, does your rental property have a smart thermostat? These help users save money on utility bills and always have the home how they like it. How about an intelligent door lock, so there’s no risk of getting locked out or forgetting to lock the door? That is something else tenants love.
But it’s more than just innovative technology. It’s also just about keeping up with the times. Double shower heads in the bathroom. USB charging ports, so they don’t need an adapter. High-end sink faucets and countertops. These may sound silly to some property managers and landlords, but it’s what discriminating renters look for nowadays.
But things don’t stop there just yet. Renters want things to be easy, and that extends to the entire rent experience. For example, if they have a maintenance issue, they don’t want to be forever trying to reach their landlord or maintenance guy. They hate wasting an entire day waiting for the repairman or pest control guy to arrive.
They want it to be easier than that. It’s okay if they have to submit a ticket, but they want this figured out the soonest. That’s where having the right property management software comes in. When done correctly, property management software helps everyone communicate, including tenants, the maintenance team, the property manager, and the landlord.
Tenant Retention: The Bottom Line
Tenant retention is an important part of your business. While incentives, perks, and amenities are welcome and effective ways to encourage residents to renew their leases, how you execute your responsibilities as a landlord is even more important and influential.
The best way to achieve this is to invest in reliable, easy-to-use property management software. A great piece of property management software like RentPost will help both parties, as it makes it easy for tenants to pay rent, report maintenance requests, and stay connected with their landlord or property manager. It also gives them easy access to rental forms and documents and keeps track of anything related to their lease or rental.
Most programs are cloud-based, meaning they can be accessed from anywhere. Even though your tenant probably won’t be logging on while vacationing across the country, they may appreciate being able to take action on something quickly, whether at home, at work, or while running errands.
Always seek to treat your tenants with respect, fairness, and consideration, which you can achieve with effective communication, consistent organization, and a prioritization of safety. Your residents will appreciate your thoughtfulness and professionalism and will likely stick around and protect your bottom line.