Retaining Good Tenants All residents at the properties should be treated since your business partners as they are responsible for income, expenses plus your bottom line cashflow. It is important to have a very good retention program and reward good tenants.
Why do people move?
People move for a wide variety of reasons and infrequently they simply like to move and still have no reason at all at all. They don''t much like the neighborhood, need to move their kids to another school, get divorced and wish to relocate, or themselves gets bigger and so they start looking for the bigger place. Some people purchase their own home, some transfer using their relatives or elderly parents, some relocate this can job change. Surprisingly the most common good reason that people move is they are now being ignored by their landlord. Not having good relationship using your tenants can result in them moving out from your property. Tenant turnover is usually costly as unnecessary work and repairs need to be done as well as the vacancy and advertising expenses have to be taken into account. To build a robust long-term relationship together with your tenants it is important to use a retention program in place.
Classify your tenants
Make a summary of all properties and classify your tenants ranking from A, B, C, D: A being simply the best headache free and D being the worst nightmare ever. Most likely your tenants class with coincide with the property class. What I mean by that is your best properties positioned in A type neighborhoods will probably have the best tenants. Good neighborhoods have more affluent, educated and responsible those who require a better life for their own reasons along with their families. These are people who are always polite, respectful, pay by the due date and never require unnecessary reasons. They will also manage their unique home and minor work that should be done like minor paint, rug cleaning and even get their very own appliances. B type tenants can also be a fantastic paying resident with some flows. Tenant type should invariably be classified by 2 factors: timeliness of rent payments and property maintenance. Lateness is just not necessarily a poor factor so long as you get to collect the rent as well as the late fees which turns out to be another source of revenue. C type tenants are the type who''ve had eviction notices for non-payment, problems with maintenance due to increased wear. They are not responsible, their telephone number is never working, they forget to cover utilities, and they go from job to job always trying to catch up using bills. They don''t maintain property well and also you may have received trash citations, violations as well as complaints from neighbors. D type tenant will be the one you want OUT. These people are those who are non-negotiable, usually have minimum education, have a go at illegal activities and in most cases are in D type neighborhoods (war zones). In D type neighborhoods the top approach is to rent the home to a Section 8 or government subsidized tenant as rent payments always turned into a problem.
80/20 RULE
Like in a business, it is likely you spend 80% of energy on 20% of one''s tenants. The goal would be to analyze which tenants result in probably the most trouble and get gone them. It isn''t well worth the time to take care of headaches, extensive repairs, late payments and evictions. Get eliminate them, require a decrease in the beginning and earn it work in the long run. On the other side do not forget about your A and B type tenants and take some time for you to reward them if you are great residents.
Implement Retention Programs
While you will be busy handling problems of 20% of your respective tenants, do not forget about the good ones. In the very end they are the ones who build your living better and headache free. Remember, when we pay punctually, they also have some expectations. When you''ve 100k inside your checking account, you expect your banker to learn you from your name; same applies to your residents. Memorize their names and their family composition. Build rapport, get to know who they may be and precisely what are their interests. Treat them where did they do, make all necessary repairs promptly and each time, follow up making use of their requests, and return their messages on time.
• Move In Welcome Package. First impression is exactly what sets the inspiration for the long term relationship. When people move into your premises help it become clean and no repairs are expected. Assist them with getting their bills transferred over and follow up to make sure they switched it to their name. We normally give small welcome gifts to new residents at the same time. We also incorporate a welcome package which has all information they have to have, including our Rent to Own program! Welcome package is definitely an possiblity to upsell your customer in the long run.
• Quarterly Check Ups. check over here is an excellent idea to perform quarterly property inspections and make sure the properties don''t need any work or maintenance. Once people decide to move it is VERY tough to change their mind, so don''t arrive at a point when it is always to late and allocate the required time on your good residents. If you do not have time to inspect the house or go to your residents, send them an e-mail, text message or come up with a quick telephone call to evaluate things. People always appreciate that.
• Avoid Frequent Rent Increases. If you might have good paying tenants, leave them at the property , nor enhance their rents frequently. Rent increases will ultimately be a problem and will build your residents move. It is especially common during times of recession when the property values drop and new landlords can easily offer lower rents as a result of lower mortgage payments. Rent increases are ok in case you are offering initial discount on your rental or if you have government subsidized tenants when a small rent increase is allowed annually. One year we made a decision to increase our rents by $25 and we lost several tenants. It cost lots of money in unnecessary repairs, advertising costs, and vacancies! It is also your TIME that needs to be looked at that you simply place into getting the home rerented. In the very end you don''t know what sort of tenant you can be with and it can cost a lot more take advantage the long run. To avoid that you can implement small "inflational" rent increases and justify them by increase within your insurance rate, property tax increase or improvements/updates that have been done at the property.
• Gifts, Postcards and Thank You Letters. Show your residents appreciation by sending them a Birthday and/or Christmas cards. You will be surprised how happy celebrate people after they get it. We ALWAYS give gifts to tenants on Christmas and New Year. It is also a fantastic idea to allow them to have a Home Depot/Lowes gift card or free carpet cleaning. It will improve your house making your tenants happy. A lot of the times it just isn''t the gift but attention you allow to people, they be thankful and a $25 gift will translate in great lasting relationship with your residents.
• Be Consistent and Do What You Promised. Managing rental properties can be a business and it must be treated like one. It is common sense but more and more people don''t do what they promise. It makes landlord look unprofessional and irresponsible. It is your responsibility to be along with management if you don''t possess a management company and yes it is really a full time job! Simply do everything you promised and promise if you cannot deliver.
• Pay for Referrals. You can turn your existing customers into more referrals by sending them either e-mail blast newsletter with new properties or simply flyers together with your properties by regular mail. It is important for you these to your "A" and "B" type tenants. Good people usually associate with like-minded people and also the chances are quite high you will end up getting one other good resident. Your tenants would not need to put your relationship at risk and they are improbable to recommend someone they don''t know personally. As in different business you wish to give incentives in your residents for referrals therefore it may be in the form of commission, referral fee, or rent discount.
• Renew Lease EARLY. Make it a habit for you renewal lease a minimum of 60 day prior to current lease expiration. At this point residents don''t think about moving and will also be more prone to sign another lease. If you do it very last minute chances are they are already searching for another place and could have found something better or cheaper, or both. Put the dates inside your calendar please remember to send the lease by mail/e-mail and confirm the receipt with tenant. You need to understand as quickly as possible in case you current resident is moving out to help you start advertising the best place. It is also a fantastic idea to review your transfer policies when they decided to move.
Policies & Procedures.
Being nice does not necessarily mean you''ll be able to avoid policies and procedures. Set expectations of one''s residents upfront and explain them everything they need to learn (it ought to be on paper with your lease agreement) about overtime policy, property maintenance, pet policy, sublet policy, tenant insurance, transfer procedures, security deposit policies, local laws and ordinances. People might not be mindful of things they are doing wrong and yes it will cause you to be look bad eventually. Set all expectations upfront and stay nice later! Find a tenant retention program that works for you and implement it regularly, test unique. Remember people are many different and what works first person may well not work with another.