Tenant turnover is a major loss for real estate investors. While filling vacancies is crucial, you still pay for marketing, cleaning, and tenant screening. That's why every investor needs a lease renewal strategy.
First, think about why tenants are moving out. Rule out forces beyond your control like out-of-state relocations or people pivoting to homeownership.
You may be losing lease renewals due to high rent prices. Tenants may be waiting too long for maintenance requests. There may be an issue with landlord-tenant relations.
The above issues can (and should) be mitigated.
Here are a few ways to encourage tenants to renew their leases.
Start Incentivising Your Tenants
It's time to start viewing your tenants as customers. After all, they do pay a monthly rent price. Like in-store customers, tenants also need incentives.
Don't let ideal tenants slip through the cracks. Similar to customers, you could reward their loyalty with incentives.
First, ask these tenants what they're looking for in a living experience. Create a tenant feedback form to understand the bigger picture.
For example, you may learn that a tenant (who hasn't renewed their lease) would like a more state-of-the-art kitchen. You could incentivize this tenant with free kitchen upgrades like a new fridge or dishwasher.
Compare the rental price to the amenities to see if your properties are worth the price.
You can't go wrong with a rent discount. Consider discounting the first three months of a renewed lease.
Improve the Property
Assess the properties (and values) in your area. This is a great way to gauge if your property needs an upgrade. For example, you may want to install a pool or clear out the backyard for more space.
Are tenants leaving because of parking?
Lack of parking is a top reason for tenant turnover in big cities. Consider installing a parking lot on your property if you have the room.
This is a good time to start rethinking your rental property maintenance protocol. Start using online request portals in your strategy so that tenants can make requests at any time. Hunter Property Management has online portals for both owners and tenants to streamline property maintenance.
Draft a New Contract For Lease Renewals
A dip in renewals is a good time to redraw new lease contracts. You can also create contracts with custom incentives for specific tenants.
This part speaks to the importance of hiring a good real estate lawyer from the start. The language in your current lease contracts may be too unclear, driving away renewals from great tenants.
Tenants should always have a digital copy of their lease contract. This is another reason to introduce a tenant portal that houses all important information, from landlord correspondence to service calls.
Keep Your Best Tenants
Save yourself the cost of low lease renewals. Start investing in incentives, property upgrades, and new contracts to keep turnover rates low.
Hunter Property Management wants to help you improve your tenant retention rates. We have a full suite of tools, from tenant screening to marketing, for investors like you.
Contact us today to talk to an expert.