Howdy Moguls, JP here with a great lesson that we haven’t typically talked about much. But it’s important enough that it certainly requires some good thoughts about it – keeping good tenants in your rentals.
In the world of long-term landloring and keeping tenants, a lot of energy is put into finding the right tenants and getting rid of the bad tenants, with good reason…
Although, I think that not enough is said about keeping the good tenants. You know and I know that the most expensive part of landlording is vacancy. It’s definitely our dirty word. I kinda cringe just typing it actually.
Vacancies can quickly suck up any profit you may have built up. Having a piece of property sitting there – empty – is not a good situation.
So of course, anything you can do to minimize or eliminate vacancy is to your benefit.
One problem is that a lot of landlords don’t recognize what they have in a good tenant. They think:
‘Cool, I haven’t had any issues with Mr. and Mrs. Tenants; they’ve been quiet and pay on time, so I’ll just stay quiet and we can all go about our own business and hope it stays this way for the long haul.’
Bad move, people!
Here’s the deal, wishin’ on star that it’ll continue to be all butterflies and rainbows ain’t gonna cut it. A successful landlord has a systemized approach to making their tenants feel good and wanting to stay.
This is stuff I’ve learned through my own experiences as a landlord and from some of my industry colleagues. These tips are super easy to implement and should help keep your rental properties occupied longer with cash in your wallet.
Get ’em, Got ’em, Good
1. Don’t let Rentals Become Vacant in the First Place by Recognizing a Good Tenant
This one seems like a no brainer, but many landlords don’t give this enough thought. If you’ve already got a good renter in place, you’re off to a great start…
We think of good renters as people who pay the rent on time, take care of the property and don’t do anything illegal or bothersome to draw unwanted attention from police or neighbors.
Obviously, this is the type of renter you want in your space for the long haul. So, recognize that you have a god thing going and do what you can, within reason, to keep them around.
2. Be Proactive
About 90 days before their current contract is up, be proactive in reaching out to tenants to ask them:
“What can we do to keep you as a tenant?”
I’m sure you’ve heard from some people that this is a bad idea. It’s not! Those Negative Nancy’s might say asking that question may encourage the tenants to request a rent reduction, or perhaps they ask you to have the carpet cleaned or throw a fresh coat of paint on the walls. Big whoop!
Here’s what I’m thinking – now I know exactly what they want to keep them in my rental, paying rent. And, most of the time, their requests cost less than a vacancy or prep for a new renter.
And, think about it this way…
What if one of the repairs they want fixed is minor but left unchecked could create a major (and costly) problem? For sure you, Mr. Property Manager/Owner, would want to fix something like that, right? Of course right!
3. Offer Rental Incentives
Another way to reduce the chance of having a vacant property is by offering incentives. You’ve probably read articles that talk about how employees who receive incentives produce better work, are happier and complain less. Well, the same thing applies here.
Again, those Negative Nancy’s may say this idea is counterintuitive – you want to bring money in, not dish it out. But, again, if the cost of the incentive is less than the cost of the expense for a turnover or vacancy – then do it.
Think about these as possible tenant incentives:
-
Limited-time rent reduction
-
“X” months free rent
-
Painting rooms
-
Professionally cleaned carpets
-
Minor repairs that may not seem major to you but mean something to the tenant
These kinds of incentives will let renters know that you’re serious about keeping them around.
And this one happens to be a win-win: Your tenants gets something nice that positively affects their quality of life, and your property gets improvements that can be good selling points to bring in future tenants when the time comes…
As you know, tenants love properties that are kept up to date and don’t have deferred maintenance.
4. Praise Good Tenants
It’s been proven that humans crave appreciation. So, when you have good tenants, let them know you are aware that they are good tenants. Send them a nice letter saying: “I appreciate you. Thanks for being a good tenant.”
Such a small gesture can have a huge impact on your tenant/landlord relationship. You’ll feel good for doing something nice and they’ll feel good because you said something nice about them. And, because you’ve been so nice and appreciative, your tenants will probably make the effort to pay you on time.
You may even want to include a friendly reminder in your note – if you’re sending your letter in the summer, add a P.S. at the bottom: “Remember, now’s a good time to change the AC filter.”
Here’s another thing some landlords don’t think about…
When you praise your tenants, they’ll probably start talking to their friends and family about how nice you are…
And what does that translate to? Referrals! Without even knowing it, your tenants can help market you as a good landlord and help get your other rentals occupied.
5. Spread Some Holiday Cheer
Send your good tenants a sweet holiday card and some nice gifts like a $25 gift card to Target or Kroger, a holiday turkey or ham, even toys if the tenant has young kids. All of this says to the tenant, “You’re special.”
And, just like the AC filter reminder in the summer letter, with your holiday letter include an informational doc about fire safety during the holiday season.
By doing this, your tenants will know that you’re in it for more than just the money – it shows you’re thoughtful and you care about them.
(By the way – you could send your ‘naughty’ tenants a holiday card, just don’t include any gifts.)
6. Negotiate
I remember one tenant I had – she was a nice gal, always paid on time, lived in the space for 3 years without issues, kept the property well-maintained – just an overall awesome person and tenant. She came to me one day and said it was time for her to move on… and my heart sank.
Instead of just saying, ‘Okay,’ I negotiated with her by saying, “What can I do to keep you here?” (Now refer back up to tip #2.)
When a good tenant says they’re out, don’t accept that. Negotiate, within reason, for them to stay.
7. Be Responsive
When your good tenants have an issue with something on the property and call you, respond as quickly as possible.
Even if you just call them and say, “Got your message, I understand the issue, let me look into this and I’ll get back with soon,” they’ll know you’re on it, which will make them feel better.
But you’ve gotta make sure you follow up on that promise as well. You said you’d look into it, so do that, quickly. You can’t leave them with a broken dishwasher for a week, for example.
By helping keep the property in good shape, you’re showing them that it’s important to you as the landlord that they live in a good house and you’re making them feel well taken care of. Plus, when they do have a nice house to be proud of, they’ll likely work to keep it that way.
Happy Tenant = Happy Landlord
As real estate investors, when we buy a property that we intend to rent out, we’re doing so with the goal of getting a good return on our investment…
A vacant property is a property that’s costing you money.
And, it’s not just the rental income you’re losing... think about all the things you’ll have to spend money on during a turnover, or worse yet, a vacancy:
-
Clean up
-
New advertising
-
Upkeep
-
Property taxes
-
Other miscellaneous expenses that are common to every property
All of these things can become a much greater burden when there’s no rent money coming in to pay for them.
So, instead of focusing on the bad tenants, give some love to the good ones by showing them that you appreciate and value them and want them to stay.
By taking good care of your tenants, they will take good care of you by keeping your property in good shape and providing you economic security.
Holla at us
Have you had positive experiences with your good tenants because you were nice to them and let them know how grateful you are to have them? Do you have another tip for landlords? We wanna hear about it in our comments section below.
Recognize that you have a good tenant.
Be proactive and ask the tenant what you can do for them to keep them.
Offer incentives to your renters, within reason, so they know you care about them and how they’re living.
Praise your good tenants by telling them how appreciative you are of them.
Send a holiday gift to your good tenants.
Don’t accept it when a good tenant says they’re moving out. Negotiate with them to stay.
Respond quickly when a good tenant calls you with a question or issue.