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As a long-term real estate investor, your tenants are the key to success. Without good tenants, your rental properties would sit vacant, and your cash flow would grind to a halt, potentially costing you thousands of dollars each month while you try to find someone new.
Ideally, once you find good tenants for a property, you want them to stay there for as long as possible. After all, the turnover period is one of the most stressful times for landlords and property owners. You do not want to go through the entire screening process again to secure another tenant if the ones your currently have are already easy to work with and dependable. So, if you are having trouble securing tenant renewals or have concerns about tenant renewal in the future, here are five things you can do to keep your tenant renewal rates high, and your vacancies low.
Now, before we dive into the world of tenant renewal rates and tricks to maintain your tenant renewals each year, let us show you how you can manipulate your mortgage to increase your monthly cash flow. That way, you will not need to rely as heavily on rental increases and can try additional measures to keep good tenants.
To get started, simply click the link below to book a free strategy call today.
Listen to Tenant Feedback
Often tenants decide they want to move because they feel like their landlords are not listening to them. So, if your tenants decide to come to you with feedback, do your best to be attentive and listen closely. Sometimes the feedback they provide can be positive and help you determine what you are doing right, while other times they will mention areas in which you can improve. Often the feedback they provide you with can be essential in ensuring they do not decide to relocate.
Sometimes the feedback you are provided with is urgent and needs to be handled immediately. For example, if the tenant informs you the heating and cooling system cuts out randomly or is not operational, you do not want to leave them waiting. If you take your time finding someone to inspect and resolve the issue, your tenant will feel like you do not care about their comfort and begin to look elsewhere. As well, during winter and summer months, a problem such as this can become a significant risk to the health and wellbeing of your tenants.
Finally, if multiple tenants provide the same piece of feedback, make sure you prioritize whatever they tell you. That way you can create a short-term solution to find long-term success.
Discover How To Deal With Difficult Tenants With This Step By Step Guide
Develop Relationships with Your Tenants
On top of listening to your tenants, it can be incredibly beneficial to form personal relationships with them. You do not want your tenants to look at you as simply the person they pay rent to each month, or else they may not feel like they are able to communicate with you and hesitate to raise any concerns they have to you.
As well, it is important your property management team and any maintenance staff you employ are able to openly communicate with your tenants. Not only will this increase their overall satisfaction and make it easier to ensure they stick around, but it can make it easier for your team to do their work as efficiently as possible.
Stay On Top of Tenant Renewal Dates
If you are trying to maximize your tenant renewals, you have to stay on top of their tenant renewal dates. If you are simply coming by with an updated contract for them to sign once-per-year, you leave a lot of time for them to find and consider other options. To avoid this, try reaching out to them approximately 90 days before their lease expires. That way you have the time to hear their concerns and address them before their tenant renewal date.
Speaking with your tenant in advance will also give you an advantage in the event you are unable to convince your tenant to renew their lease. If you know months in advance that your property is going to be vacated by your current tenant, that provides you with time to market your property and schedule showings in order to find a new tenant and minimize the amount of time the unit is empty.
Of course, there will be situations where you decide a tenant is a poor fit and you do not want to gollow through with them through tenant renewal. If this is the case, meeting with them in advance and informing them of your intentions provides them with time to relocate as you prepare to move a new tenant into the property and reduces stress and conflict at the end of the lease term.
Incentivise Your Tenants to Stay
If you want a tenant to stick around and continue renting from you, it can be advantageous to offer incentives in order to convince them to follow through with tenant renewal.
The benefits you can provide can vary from rent discounts, gifts to updated amenities for the property. Just make sure whatever you provide aligns with your tenants wants and needs.
For example, if your tenant does not have a dishwasher in their unit, you can offer to have one installed, or you can offer to update the faucet to make dishwashing more time efficient. Not only will incentives such as these help keep your tenants satisfied, but they will increase the value of your property as well.
Be Mindful When Raising the Rent
Naturally, as your property appreciates you will want to raise the rent. Otherwise you are going to lose money over time due to inflation. However, many tenants will cite rising rental rates as their reason for moving. After all, if they are going to be spending more money, why would they not look to see if it is possible to find something newer and nicer for the same price.
So in order to manage both your own need to increase the rent and your tenants desire to avoid rental increases, you need to prioritize smaller annual increases that your tenant can work around as opposed to sudden larger increases after years of consistent costs that will turn your tenants away and tank your tenant renewal rates.
If you can, try to save any larger rental increases for turnover periods so that you do not lose any tenants. If you are in a position where you need to make a sudden increase, try to communicate the circumstances with your tenant so they can be more likely to understand the increase and stay where they are.
For more information about the world of real estate investing, contact us at LendCity. We can be reached at 519-960-0370 or you can visit us online at LendCity.ca Alternatively, click the link below to book a free strategy call with us today.