To minimize turnover, you should regularly keep in touch with tenants, make yourself available to tenants, and make smart investments that add more value than they cost.
Ask About Lease Renewal Early
Don't wait until a month or two before the lease is set to expire to ask about re-signing. This shouldn't look like repeatedly asking whether or not your tenant will be renewing. Instead, you should be consistently touching base with your tenant to make sure they're happy in their place.
You can follow the two-two-two rule by checking in two days before the move in, two weeks after the move in, and then two months after the move in throughout the duration of the lease. Communication makes tenants feel appreciated and cared for, and happy tenants are more likely to renew.
Make your business and units as modern as possible. That means letting your tenants pay their rent online, communicating via digital means like text or email, and installing smart devices such as thermostats or keyless entry. These sorts of investments are low in cost but high in value because they increase ease of living significantly. Plus, as these items become more and more common, not having them in your unit will start to make other units look more appealing.
Follow Resident Feedback
While you're touching base with your tenants, ask them if there are any improvements they'd like to make. This is a great way to highlight your commitment to your tenants and address any issues they may have failed to mention.
Sure, their toilet might consistently leak, but it's no big deal to them, so they say nothing. But a year's worth of drips onto your floor can lead to mold and floor damage. Better catch it soon so that they decide to renew quickly!
If you're competing with new apartments, you may come out on top just because of your lower prices. But with enough amenities, a high price point ceases to be a deterrent. Pools, laundry, storage, rentable meeting/party spaces, etc. all sound pretty appealing when you start adding them up!
To compete, you can improve what you already have. An unused basement can become a storage space. A backyard can get an outdoor patio, and a hallway closet can become the home of a washer/dryer, etc. Those things add up too, but they don't eat up your bank account! And if you don't have any ideas, ask your residents as you should already be doing.
A month of free rent if your new tenant signs their lease today can be effective advertising, but why limit it to new tenants? Instead, offer it to existing tenants to encourage them to resign their lease.
This would be a brilliant idea if you were planning on charging your new residents less rent than your pre-existing residents. Focus on what has appeal for all tenants instead of letting everyone know the prices.
Be Ahead of the Competition
If you find that other landlords in the area are starting to ask for renewals 60 to 90 days before the sign-by date, start asking 90 to 120 days before the sign-by date. You want to get your tenants thinking about renewing before they start thinking about leaving!
Make Concessions When It’s Worth It
If a tenant says that their appliances are out of date or that their counters need replacing, you may be making a significant investment in your unit. But it's worth it if the result is keeping a great tenant. Ensure that when you're surveying your residents, it's clear that you're taking suggestions rather than making promises.
Study the Competition
Study the rent and lease terms in your area. When setting your rent price, in general, you should be considering revenue and occupancy rates. Sometimes it's worth it to keep your rent lower if you're less likely to experience vacancies. Make sure you're not doing anything that sets you apart from the competition in a bad way. If the security deposit tends to be one month in your area, don't make it one or two.
And tour your competitor's properties as well. If you notice granite countertops across the board, you're going to need to get them--or something comparable--because your property will otherwise not look as nice.
Care the Extra Mile
Making your tenants feel cared for is about more than just keeping in touch. Send them a holiday card, let them know you're grateful when they've been there for a few years, and remember their kids and pets (write them down if you have to).
If you have a good tenant, then they may know someone who would be a good tenant themselves. So, incentivize your tenant to refer the person who they think would be a good fit for one of your properties.
And having someone your tenant already has a good relationship with as a roommate or occupying a nearby property will further incentivize your tenants to stay and lower the likelihood of neighbor disagreements.
Your incentives can be a month's rent, gift cards, or cash. Whatever you decide, make sure to publicize your plan once it's in place.
One-Up The Competition’s Lease
If you want stable tenants, you may need to make concessions that others aren't willing to make. You can promise not to raise the rent if tenants sign for multiple years. You can also allow pets.
One of the keys to getting your tenants to resign their leases is by letting the competition inspire you. Whether you use a property management company or are managing your unit and residents on your own, you will want to ensure your unit is rented to have stable cash flow.
If you're dealing with amenities, provide your own; if you see particular upgrades, make them too; and if you want to retain a tenant, offer incentives, others are not.
Remember, happy tenants re-sign!