As a landlord, tenant retention should be one of your top priorities. In addition to stabilising your rental income, keeping great tenants in place longer can save you significant stress. However, reducing turnover requires careful planning and an ongoing commitment to developing and maintaining constructive tenant relationships.
Acknowledging this, we wanted to explore why tenant retention is so important and how you can boost your retention rate. We also wanted to share our advice on the simple, but effective, strategies you should start trying with your tenants.
The benefits of longer tenancies
As any serious investor will tell you, tenant retention is the key to maintaining a successful rental property. Having high-quality long-term tenants in place ensures a stable flow of reliable rental income, making future investment planning much easier. It also minimises the risk of vacancy and the cost (including lost time and income) that comes with it.
Tenant retention activities often also acknowledge that the property is your tenant’s home and should be treated as such. This creates a sense of ownership for them, encouraging and empowering them to play an active role in its upkeep. This generally results in better maintained properties and a lower risk of requiring significant repairs.
Our top 10 tenant retention tips
Every tenancy is unique, and every tenant has their own needs, plans, and motivations. As such, there are many different ways to keep your tenants engaged, satisfied, and in your property for longer. Here are the top things we recommend you try:
1. Choose your tenants carefully: Before you invest in retaining a tenant, you want to be sure they are right for the property. This starts at leasing, where a structured screening approach will help make sure you select a great applicant. As part of this, it’s important to look beyond income, and consider the history and character of your preferred tenant.
2. Establish open and honest communication: As with every other relationship, communication is the foundation of a positive and productive landlord-tenant dynamic. Giving your tenant clear lines of communication reduces uncertainty and ensures they can raise questions and concerns. Taking the time to understand your tenant’s priorities and preferences also allows you to tailor your approach to engaging them.
3. Be responsive: Being easy to contact means very little if your tenant doesn’t feel like they are being listened to. Committing to reasonable response times helps manage their expectations, while ensuring you have time to consider their requests. And, if it’s a no, explaining your reasoning and offering an alternative (if suitable) should help soften the situation.
4. Let your tenant personalise the property: The more the property feels like their home, the less likely your tenant is to want to move on. Allowing them to customise the space to reflect their requirements and style helps ensure they are happy and comfortable. You also cannot unreasonably refuse minor changes, and everything needs to be changed back at the end of lease anyway.
5. Prioritise maintenance: While maintenance issues may seem minor to you, they can be a major problem for your tenant. Implementing proactive maintenance helps ensure the property remains in good condition and prevents bigger issues from developing. Promptly attending to reasonable repair requests also shows respect for your tenant and a commitment to investing in the property.
6. Show your appreciation: Small gifts and loyalty rewards are an easy way to demonstrate that you value your tenant’s contributions. This could be a welcome pack at the start of their lease or a little something special at Christmas time. It could also be something to specifically incentivise them staying on, like a week’s free rent for renewing their lease.
7. Create certainty: Speaking of lease renewals, the impending end of a lease can be a major source of stress for your tenants. By starting the conversation about renewal early, you provide stability and continuity, and reduce the risk of them looking elsewhere. Being flexible on lease terms and open to locking in rent rates for longer also shows you value their tenancy.
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8. Handle disputes respectfully: Maintaining open communication and being responsive should allow you to avoid – or at least quickly resolve – most issues. However, disagreements can still happen, and how you handle them will have a major impact on your tenant retention. Make sure you have a structured dispute resolution process, objectively consider your tenant’s concerns, and accurately document every conversation.
9. Take a longer-term view of rental returns: A high-performing investment is as much about stability and reliability as it is about the amount of income produced. Pricing strategically and keeping rent competitive when the market has plateaued helps balance returns against tenant retention. Also, when you consider turnover costs, a minimal increase, or even slight decrease, is often the most financially savvy decision.
10. Engage professional support: A good property manager understands the importance of tenant retention and will know how to build lasting relationships. When choosing who to work with, look for experienced rental market experts with a proven ability to reduce turnover. You also need to be comfortable taking their advice and empowering them to act on your behalf.
Want to discuss this further?
If you would like more information on tenant retention, give Local Agency Co. a call. Our experienced team are experts in attracting and selecting great applicants and building productive, lasting tenant relationships. So, whether you’re approaching the end of your current lease, or about to start a new one, we can help.
CLICK HERE TO SPEAK WITH AN EXPERIENCED LOCAL PROPERTY MANAGER