Avoiding a frequent turnover of tenants is high on the list of a landlord’s priorities with good reason: the costs associated with tenant turnover are compounded by the opportunity loss associated with a vacant property. In today’s fiercely competitive real estate market, keeping a stable and profitable tenant relationship is a balancing act that influences the property’s long-term profitability and its marketability. As a result, the process of retaining good tenants extends beyond effective public relations to a judicious combination of carefully implemented practices before, during and after a property is rented.
One of the most overlooked steps in a rental relationship, screening potential tenants is crucial to the prevention of high tenant turnover. Screening a tenant goes beyond a cursory glance at the applicant’s credit report and involves a detailed perusal of the rental application followed by an interview to analyse a potential tenant’s prior renting pattern, references, employment history, and if possible, establish contact with prior landlords. An interview with the applicant is also an essential part of the screening process because it can help you assess an applicant’s behaviour and gain insight into how long they can be expected to stay.
A well-structured, comprehensive, and fair rental agreement is at the heart of any successful long-term rental relationship. A rental or lease agreement that is easily comprehensible and well-categorised into appropriate sections that detail the privileges and responsibilities of the landlord and the tenant is the first step to ensuring a good working relationship and a lower tenant turnover. While serving its primary function of establishing ground rules, a good rental agreement also documents both parties’ expectations for the proper use of the property with clear guidelines about important aspects such as the ownership of pets, the terms of a security deposit, and access to common areas and amenities.
Today, it is not uncommon for landlords to experience a high turnover of tenants from their properties because of complaints about under-maintenance or the lack of improvements to the premises. Gone are the days when a landlord could rent a property and be assured of a regular rental income in absentia. Performing regular inspections, preventive maintenance, and the occasional functional or aesthetic improvement to the property may entail an expense, but reaps rich dividends in a stable and sustained long-term tenancy.
Pitching a property to an appropriate rental demographic plays a significant role in the sustainability of the landlord-tenant relationship. The location of the property, the rental profile of the neighbourhood and access to local amenities are key factors that determine the type of tenants who would seek to rent in the area. For example, a property that is located near a school may be attractive to families with young children, a property near a business district may attract young adults, and an apartment near a university campus may attract students who wish to enter into a flat sharing tenancy agreement. Understanding your property and marketing it appropriately can improve the chances of a stable tenancy.
Forum for Feedback
Lending a listening ear can serve as an alert to potential problems and prevent the unwarranted turnover of tenants. Whether in the form of an informal chat or a periodic tenants’ meeting, creating a forum where a tenant’s feedback can be heard, documented, and acted on is a powerful way to build trust and goodwill. Ideally, the outcomes of such a meeting should translate into actions that are the responsibility of both tenant and landlord with reasonable timelines.
More often than not, tenants measure value for money in terms of the conveniences offered by a landlord. For example, landlords who offer value-added conveniences such as a facility to pay rent through multiple channels or access to reliable contractors for appliance and utility repairs may enjoy a lower turnover of tenants in their properties. Some landlords may even offer a rental agreement with no increases in rent for tenants who sign long-term rental agreements. Tenant loyalty programs with rent-based or non-monetary benefits are proven and effective retention techniques.
An ever-changing market and newer properties make keeping good tenants a challenge, but one that can be surmounted by taking effective steps to ensure that the lines of communication between you and your tenants remain open and fair at all times. Preventing a high turnover of tenants in your property also requires you to ensure the regular and adequate upkeep of the property at all times.