In real estate investment, tenants are the most important factor in owning successful properties. As a real estate investor, making sure that your tenants are happy means that you will continue to see healthy returns.
Renters who are happy tend to stay in their properties longer and usually take better care of them. This will help property investors reduce vacancy time and ensure that monthly checks continue to arrive. Having happy property occupants might even help to reduce the amount of maintenance that is required both during the tenancy and after.
Smart real estate investors understand that there is more to successful investing than just finding new tenants and ensuring that the building looks nice. Just like many other companies, real estate investors are in the business of customer service.
Building relationships with tenants and keeping them happy throughout the time they live in the property will be a benefit for the investor in the short term and in the long run. Additionally, when renters move out, they could prove to be some of the biggest advertisers if they have been provided with a quality experience.
Although renters sometimes have personal reasons for not renewing a lease agreement, many often leave because they are not happy with the property or management. As a result, there are some things that investors and property managers can do to keep good tenants and ensure that they stay long-term.
Let’s take a look at some ways that real estate investors, and those who manage their properties, can make sure that tenants are happy.
1. Address concerns and issues quickly.
An unhappy renter probably isn’t going to jump at the chance to sign a new two-year lease extension. When a property needs repairs and maintenance, property owners will have difficulty selling lease renewals if requests go unanswered and unaddressed.
A renter trying to get their garbage disposal fixed for weeks only to run into unanswered calls and emails isn’t going to be very happy. Investors and property managers need to work together to create an effective system for answering and addressing maintenance issues efficiently.
Even if your building offers new features and upgraded appliances, none of that will matter if they don’t work properly. When property owners address concerns and issues quickly, they show that they care about their properties and the personal satisfaction of their tenants.
In some instances, however, a problem may not be able to be handled quickly. In this situation, communication and alternative solutions will go a long way. If renters are confident that property owners and landlords are working on their behalf to address issues quickly, it will ensure tenants are happy with both their home and property management.
2. Show appreciation and provide incentives.
As discussed, property investors are in the business of customer service. Similar to the way that retail shops show appreciation for the customers who purchase products, property owners need to recognize the importance of tenants.
While investors provide renters with a place to live, those tenants, in return, pay a monthly rent that contributes to mortgage payments, investments, and other bills. Tenants are responsible for putting money into the pocket of investors. The landlord-tenant relationship is a business relationship, and as such, customer appreciation is required.
As an example, property owners could give gift baskets, cards, or other tokens of appreciation around the holidays. This could send the message that landlords aren’t just in it for a check, but that they are also happy to have the occupants in the building.
Additionally, investors could pitch in with seasonal expenses such as splitting landscaping costs or helping with garden upkeep. This will help the tenants out and ensure that the property is well-maintained.
Aside from gits of appreciation, landlords might also consider providing some incentives to make renters feel like they are being rewarded or getting a break. While investors want to ensure they aren’t taking a financial hit, there are some things that could go a long way toward making tenants feel incentivized.
Offering utility assistance through flat-rate fees year-round will make it easier for tenants to budget each month. Running first-month-free promotions and offering discounts for automatic rent payments or post-dated checks could also create incentives. It is important to ensure that property occupants feel like they are getting something other than just a place to live.
3. Respect tenants’ rights and privacy.
In many areas, state and local laws dictate that landlords must respect tenants’ rights. Before property managers or others can go into a location, notice has to be given. Not only is this the law, but it is also one of the biggest ways to ensure that occupants are comfortable and happy.
Before sending contractors, inspectors, or other personnel into the building, it is important that all tenants are aware and prepared. Tenants need to feel as though they are in control of who enters their home and when. Communication will be critical for ensuring happy tenants.
Unless there is an issue that needs attention, property occupants rarely want to see their landlord or property managers. Real estate investors need to work with staff and property residents to create a climate of respect where privacy is of utmost importance.
In cases of problematic tenants, there might be occasions where excessive contact is required. In the majority of cases, however, property occupants need to have a sense of privacy in their homes. This will make for happy tenants who are willing to extend their lease and continue making timely payments.
When you ensure tenants are happy, it means avoiding vacancies, damages, and negative cash flow. Smart real estate investors will do well to remember that they are also in the customer service industry and need to ensure that all tenants are happy.
The basic idea behind retaining happy and long-term property occupants is that they need to feel appreciated and treated with respect and courtesy. Property owners want renters to feel connected to the property as their home and to the excellent service and support they receive. Tenants who are happy and have good experiences are more likely to stay long-term as well as recommend the property to family and friends.
About the Author:
Annie Dickerson and her partner Julie Lam are founders of Goodegg Investments — an award-winning real estate private equity firm — and creators of the Real Estate Accelerator Mentorship Program. They are authors of the book Investing For Good and hosts of the popular Life & Money Show podcast: good egg investments
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.