In today’s market, attracting and retaining great tenants in multifamily units is vital to the success of an investment. You can utilize several methods to ensure you are enticing quality tenants who will then stay long-term. These approaches, when coupled with excellent underwriting, will be key to ensuring the most out of any multifamily investment.
Define Your Ideal Tenant
The first step is to discern the type of residents you want to appeal to. Your team should begin by analyzing local demographics, such as median income and family structure. These benchmarks not only aid in setting rents but also help provide perspective into what amenities these renters are searching for and where to focus your CapEx budget.
For instance, if most of the prospective tenant pool is made up of families, you may choose to invest in kid-friendly amenities such as a splash pad or playground. If the local demographics are made up of young professionals, you may want to focus on an upgraded business center or shared social events space.
Use the Right Marketing Tools
Social media and web design are instrumental marketing tools in the world today. Many tenants expect to be able to access a virtual tour before ever stepping foot on the property. As an owner-operator, you should ensure the property’s website is extremely user-friendly. From the site, it should be easy to contact someone with questions, book a showing, see available units, and view amenities with high-quality photography.
Social media should be updated regularly, be engaging, and consistently direct followers to the website. It is vital for the property’s social media manager to also engage with others’ relevant posts for the algorithm to push your content in front of the desired market.
Consider Your Tenants’ Priorities
Although resident turnover is inevitable, your goal should be to minimize how often tenants are leaving. In order to retain great tenants, focus on what is most important to them.
Having on-site staff who are second-to-none in terms of attentiveness and helpfulness is an appreciated attribute. When your properties are maintained immaculately and work orders have short turnaround times, your resident turnover will drop. On-site staff is also responsible for being the bridge between the day-to-day operations and the owner-operators.
As your portfolio grows, you cannot physically be at each site every day. By having trustworthy, responsible, and reliable property management, you will be able to ensure that you are made aware of what potential issues are going to arise and subvert the problems before they inconvenience your tenants.
Create a Sense of Community
Community engagement is also very important to overall resident satisfaction. If tenants gain a sense of community, they feel safer and more comfortable and are therefore less likely to look for other housing. You can run resident socials and events every month to show gratitude for your tenants, as well as encourage connections among neighbors.
Another way we express appreciation is to run contests for your lessees, such as a green initiative, where the unit with the lowest energy consumption for the month receives a gift card or discount on their rent. Competitions like this are inexpensive ways to achieve community participation from residents.
Continue to Add Value
If and when a unit is vacant, you cannot forget to leverage this to your advantage. Successful investors will use this opportunity to upgrade the unit and add value to the project. Small and fairly inexpensive changes can make a huge impact.
In Class B assets, for example, the biggest ROIs consist of upgrading appliances to stainless steel, changing carpets to luxury vinyl plank, painting, and adding in-unit washers and dryers. Upgrading units will continue to push rents and increase the property value of the investment.
No matter which market you decide to enter or the class of properties you own, tenants are the lifeblood of each project. Ensuring their home lives are as convenient and stress-free as possible will benefit your investment in the long term. By taking simple steps throughout the process of attraction and retention, you will be able to facilitate building a great tenant pool with minimal financial expenditure, therefore maximizing potential returns from the investment.
About the Author:
Veena Jetti is the founding partner of Vive Funds, a unique commercial real estate firm that specializes in curating conservative opportunities for investors.
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.