Tenants come and go. That’s the reality behind real estate investments. But too many tenants coming and going can become a substantial financial problem. The higher your vacancy turnover rate, the less profit you make.
Some landlords have a high turnover rate, others have a low rate.
Why is this? What’s the difference?
What is one landlord doing right that other landlords are doing wrong?
Landlords should seek to reduce tenant turnover as much as possible. And yes, there are strategies that landlords can take to reduce this rate. Here, we’ve taken a few minutes to put together a guide that explores ways to reduce your vacancy turnover rate – saving you substantial costs, and time, over the long-term.
#1 Be Careful about Rent Increase
The dynamic between landlord and tenant is simple; the landlord wants to generate as much profit as possible and the tenant wants to find the most affordable property that meets their needs.
This equilibrium can take quite a shake if you substantially raise rent. Tenants may not have received a pay rise. Perhaps their costs have increased over the year, too, meaning that, even though their pay remains the same, the rental increase has suddenly become unaffordable.
In the end, it can lead to tenants vacating your property.
By increasing the rent gradually, and in tandem with local rental property rates, you can keep that tenant for another year or more.
#2 Search for Quality Tenants
Searching for quality tenants time, there’s no two ways about it.
But that time is very well invested. If you don’t spend enough time, or if you don’t hire a quality property management company, you end up with tenants that are nothing more than a qualified headache.
These tenants can cause you substantial stress, potential damage to your property, increasing the risk of embarking on eviction proceedings, and can cause you substantial legal difficulties. All this, without mentioning the associated financial loss and disruption to your monthly mortgage payments.
Don’t take the risk. If you don’t have the time to perform thorough tenant screening, think about hiring a property management company to do the work for you.
It can substantially reduce your vacancy turnover rate.
#3 Search for Tenant Feedback
Build the landlord-tenant relationship as best you can.
Think about things from the tenant perspective. If you were a tenant, what issues might bother you about the property? Not all tenants think the same, though. That’s why it’s vital to talk to your tenant and learn about any potential or actual problems they face.
Try to be approachable, not defensive. Tenants won’t contact you if they feel they are a burden or stress-inducing agent. By staying open-minded, reasoned and approachable, tenants will feel comfortable contacting you.
In this way, you can strengthen the landlord-tenant relationship whilst ensuring that tenants are willing and comfortable to remain as your tenant going forward.
#4 Consider Accepting Pets
Almost 70 percent of US households have a pet.
By having a blanket ban on all-things pet-related, you narrow your prospective market. Don’t be afraid to add terms and conditions to the lease agreement, stating how responsible the tenant must be – on a month-to-month basis – to ensure that the property is kept well-maintained; that there are no unwanted long-term smells; and to ensure that the property is not damaged by the pet.
In this way, you open the market to quality tenants without the associated stress or risk this decision can, in some instances, bring with it. And, as we earlier discussed, the better-quality tenants you find, the more likely they are to stay long-term – to reduce your vacancy turnover rate.
#5 Think about Modern Tech Trends
Millennials love technology.
The more modern, the better. Think about adding modern tech trends to your home to not only attract new tenants but to keep them, too. You could think about adding one or two new great tech solutions toward the end of the tenancy – an added inducement for them to stay on for another year.
To reduce your vacancy turnover rate, you need to adopt a new approach.
Here, we’ve discussed just some of the techniques you can implement – to strategize about incremental rent increase; to invest time searching for high-quality tenants; to seek out and act on tenant feedback; to consider allowing pets; and to think about adding modern tech trends to your home.
By making this extra effort, and by ensuring your rental is well-maintained throughout the duration of the lease agreement, you increase the likelihood that tenants stay on for longer.
And that, in the end, is what matters.
Triumph is the leading property management company in Las Vegas. Check back to our real estate blog soon for even more great tips and tricks on how you can reduce your vacancy turnover rate.