As a landlord, it can often feel like you are always looking for a new tenant. Even when you have the help of a reliable tenant screening or property management company, every day that one of your properties goes unrented, you miss out on profits.
Tenant retention is, therefore, very important! Tenants that stay on for multiple rental periods reduce turnover and help minimize the amount of work you need to do while maximizing profits. If you need to find new tenants frequently, you might become overly exhausted with the rental world as well.
How can you improve tenant retention? Let’s explore 10 great ideas under $15 for landlords to improve their retention rates as well as some more information about how tenant retention helps income!
A Table Of Contents For Tenant Retention Ideas
- What Is Tenant Retention?
- Why Is Tenant Retention Important?
- 10 Great Ideas Under $15 To Improve Retention
- Your Own Way Wins
What Is Tenant Retention?
Let’s start by covering the most essential basic: what is tenant retention?
Tenant retention refers to the turnover rate of tenants at your property. Specifically, tenant retention rates measure the number of tenants that stay at a property for multiple rental periods. Many landlords believe that this metric is a great way to keep track of their growth and progress as a landlord. And we agree!
Why Is Tenant Retention Important?
Improving tenant retention is important to many landlords; why do they find this specific metric to be so important to the success of their business?
Replacing a tenant can be costly:
- Vacant properties mean lost profits
- Brokerage commissions for leases and contracts
- Relocation costs, if applicable
- Expenses of cleaning out and up an apartment
- Expenses of screening tenants
These aren’t the only ways that a tenant moving out can cost you. Depending on the age, condition, and location of a property, a tenant moving out might signal time for upgrades or repairs before you can get the property rented again.
Keeping the same tenants at a property for more than one rental period has many different benefits as well:
- Prevents vacant periods
- Confirms success of your business and current best practices
- Keeps the property in good condition
In retail businesses, it’s been shown that improving customer retention by just 5% can improve profits by up to 95%! While the rates aren’t the same in real estate, the same concept applies.
Tenant retention is a great indicator of your property’s health in terms of both management and condition, so you should focus on having good retention numbers to ensure that your tenants are happy and your rental business is successful.
10 Great Ideas Under $15 To Improve Retention
There are tons of different ways to improve tenant retention, and some of those methods can be quite costly! Major repairs to outdoor or common areas or huge furniture incentives might be good ideas for some landlords, but many cannot use such costly methods to improve their retention rates.
Don’t fret if you can’t afford anything big; there are a lot of smaller ways to work on your improving tenant retention as well. Try one of these 10 tenant retention ideas!
1. Send Out A Survey
One of the easiest ways to see what you can do better with your tenants is to send out a survey and provide a $10 or $15 gift card to those tenants that complete the survey. Give the tenants an option to fill out the survey anonymously so that they can be completely honest without fear of repercussions.
Learning what tenants think about your property and what they would like to see more of can be an invaluable asset in improving your tenant retention rate.
2. Screen Tenants More Thoroughly
While a tenant screening profile cannot tell you who will stay for longer than one rental period and who will not, there are some signs that you can look for when choosing tenants to improve retention.
Tenants that are not reliable are more likely to move frequently. This is because they aren’t able to keep jobs in the area or pay rent in a timely manner, so they need to move on. Be careful to choose a reliable tenant during screening and it will pay off.
If they’re not going to be a good fit for your property, deny the application and find another renter.
3. Do Exit Interviews
The best way to find out why tenants are leaving is to ask them yourself! Do an exit interview with tenants and find out the following:
- Why are they leaving?
- What type of property are they moving to?
- Is there anything that might have incentivized them into staying?
The information gathered for exiting tenants is invaluable at preventing more tenants from leaving. Turnover is expensive; finding out this information is not.
4. Make Yourself A Renter File
A very inexpensive way to improve retention is to make yourself a computer file or buy yourself a notebook where you can keep track of conversations you have with your tenants. This is especially important if you have a lot of tenants and have a hard time finding ways to connect their information.
Keep notes of tidbits that tenants tell you. Are they running a marathon soon? Is their brother getting married? The next time you see them, ask about that information.
By learning more about your tenants, you can engage with them on a deeper level. This type of connection can truly help tenants stay longer, and tenants will feel more comfortable to reach out to you if they have any problems.
5. Send Holiday Cards
A quick, easy, and thoughtful way to remind tenants how much they are appreciated is to send out a handwritten holiday card each year. These cards don’t need to be long or expensive. Just let the tenants know that you are thinking of them, and you might be surprised at how much your relations improve.
6. Put More Into Maintenance
Invest an extra $15 per property into your maintenance budget each month. Whether this goes towards general repairs or towards common areas, the small amount can make a big difference. One of the most common reasons that tenants move on from a property is because the maintenance wasn’t handled well, so get a grip on yours!
7. End-Of-Lease Period Gift
When it is time for you to find out if your tenant is going to renew their lease or not, pick out a small gift for the tenant. Something like chocolate from a local shop or a bag of coffee is an easy gift.
Drop off the gift and let the tenant know that you’ll be mailing out the renewal information for them to look over. By connecting with the customer directly, you’ll remind them of all the positive interactions they’ve had while they decide if they want to stay or not.
8. Invest In Energy Savings
One thing that tenants will always appreciate is a way to save more money! While you might not be able to lower their rent or do any massive renovations, there are smaller ways that you can help them save a bit of money.
Adding extra insulation to properties that suffer from heat loss can cost less than $15 and save your tenant a lot of money on their utility costs. Alternatively, using a hot water heater blanket can also help tenants save money on their utilities.
9. Buy A Calendar For Special Dates
Buy yourself a calendar that is dedicated to tenant-specific dates. Write move-in dates, birthdays, anniversaries, relevant holidays, and more! On each of those dates, reach out to the tenant or send a card to your tenants to let them know that you’re thinking of them.
Small acts of kindness like this can make a big impact on your relationship with your tenants.
10. Don’t Encourage Frustrating Renters
Finally, it is important for you to know when to let a renter go. If a tenant is consistently paying late and causing grief for you and their neighbors, don’t ask them to renew their lease. Send out a non-renewal notice when the time is right, and accept that you won’t always achieve 100% turnover.
Sometimes, letting a tenant go to find a more reliable one is worth the knock to your retention rates.
Your Own Way Wins
If you’ve been left wondering how tenant retention helps income but aren’t sure what will work best for your needs just yet, think about what makes sense for your tenants and your business at this time.
The idea that will work best for improving tenant retention is the one that you are most comfortable with. Focus on that, and your business is sure to grow!