Keep Tenant Turnover from Ruining the Bottom Line
One of the main jobs of a professional property manager is to keep the properties they manage profitable by leasing to good tenants who consistently pay their rent on time, and keeping those tenants in the property as long as possible. Tenant turnover—the time when a tenant leaves and a property or unit sits vacant—is an expensive challenge that can keep a property from being a lucrative investment. Knowing how to prevent tenant turnover can make all the difference between a profitable rental property and one that costs more money to maintain than it makes.
Here are eleven ways to stop tenant turnover, deal with a tenant who is leaving, and get a new tenant into the property quickly.
- Choose the right tenants. A good tenant screening process will help identify red flags and avoid problem tenants before they become problem renters. Also, don’t be afraid to ask how long a tenant plans to stay in the rental property.
- Keep your property in good shape.The nicer the property, the more likely a tenant will want to stay. Keeping the lawn mowed, the landscaping pretty, and the property in good repair can make a difference in the tenant experience. Property managers can also ask tenants directly what else they could be doing to make the property more livable.
- Address any concerns or issues immediately. No property is perfect. Tenants are going to have issues, whether it’s an unpleasant neighbor or a broken dishwasher. No matter what the issue is, property managers need to respond as quickly as possible. Solutions won’t always be fast or simple but acknowledging the problem and working towards a solution will go a long way in most tenants’ eyes.
- Be flexible. A property manager that can be a little flexible and understanding when life goes sideways for a tenant can actually help keep their property in the black in the long run. A loss of a couple hundred dollars might seem like a lot, but it’s actually cheaper than dealing with a vacant unit.
- Request ample notice. In most cases, tenant turnover will eventually happen, no matter how great the property or property manager is. Being prepared for this contingency can help limit the damage to the profit stream. Property managers should require at least a month’s notice from tenants who are planning on leaving. It might not always be possible but putting it in the lease can help.
- Run a pre-vacancy inspection. Once a tenant plans to leave, property managers need to prepare for their departure. Before the tenant moves out property managers should run a pre-vacancy inspection. This will help identify problem areas before the tenant is gone, and also help the manager know what they will be working with.
- Work proactively. Don’t wait until the tenant is gone to start looking for new tenants. Be proactive, looking for potential occupants as soon as possible. This is especially important if the property manager has a lengthy screening process.
- Update the property. The property can be updated even before the tenant is gone. New appliances, new additions, and new paint jobs can help a property look newer and more appealing to potential tenants.
- Price your property appropriately. Once a property is vacant, a property manager needs to work full time to fill the vacancy. One important aspect of that process is to price the property appropriately. The property needs to stay profitable and be competitive but stay in a price range that will attract a lot of attention.
- Use multiple channels. Professional property managers like Martin Feinberg will use many different strategies—such as paid advertising, social media, word-of-mouth, and classifieds—to get the word out about vacant properties.
- Work quickly, but do your research. The sooner a vacant property is rented the better, but property managers can’t just lease to the first prospective tenant that comes along. It’s more important to find a good tenant than an easy one.