Tenant retention provides a huge advantage to any property management company who devotes the time and energy. You save your property owner’s a ton of money by eliminating expensive costs getting the unit rent ready again. Painting, cleaning, yard work, and minor carpentry repairs can easily run $1,000 to $2,000 every time a tenant moves out.
Here are my tips to entice tenants to renew their lease.
1) Do repairs in 24-72 hours and do them right.
It is amazing how few property managers actually do repairs on their rentals in a timely manner. The tenants see timely repairs as your first and last responsibility. Since most of them have experienced several landlords that took forever and required four or five phone calls to fix anything, prompt repair service is a wonderful surprise.
2) Have one or two back-up trade’s people for every type of job.
You will find that certain types of repairs come in waves. A Tampa property management company might manage several hundred rentals, and there are some weeks it could have a ton of plumbing repairs and others that are mostly AC repairs. Also good trades people get busy with other clients. They go on vacation, get injured, move-away, and occasionally lose their minds. Think of these vendors like a computer system. You have a primary power source, but if that goes down you immediately switch to auxiliary power.
3) Be flexible and patient when tenants run into financial trouble, just not too patient.
I can’t tell you how many property managers have a firm, inflexible policy for rent collection. The rent is either paid by the 5th, or eviction paperwork is filed as soon as legally possible. I find this absurd.
There will be times when good tenants run into financial hardship. I used to become upset by this because I believe rent should be paid before any other bill. Eventually, I just learned there is not a rental utopia out there. 80% of all tenants will from time to time run into financial hardship.
You should never let them get two months behind, but you should set up payment plans which will allow them to get caught back up. Tenants will remember your patience during these occasional tough times and are much more likely to renew their lease. A landlord can get an extra year on average out of tenants because of this technique.
4) Do not ever lose your temper with a tenant.
It is much better to talk softly and use a big stick calmly and professionally. This means you should strive to be polite and respectful even in the worst of circumstances. If a client lies to you about rent, pets, damages, or whatever, try and not take it personally. A large percentage of tenants lie as sure as the sun rises and sets. It is how the world works. You must establish consequences to these actions. You’ll find that enforcing late fees sends a clear message about rent. In Florida, you send a 7 day notice to remove unauthorized pets or pay a pet fee, or set-up a payment plan for damages that a tenant can pay off over the course of the lease.
Will all tenants respond positively to this type of behavior? No, but you should not care. If they try and take advantage of you, call them on it. If they continue, file for eviction. My goal is to try and avoid escalating a tenant dispute to the point that we are yelling at each other and the tenant becomes very angry. Regardless of who is right or wrong, you should avoid trying to convince people they are wrong. You just state the consequences in a pleasant tone and enforce them.
These four tips should be the cornerstone for all tenant relations and retention. If you want a tenant to renew, you need to keep the place in good repair. More importantly, you need to communicate in a professional, patient manner even when they are hostile or lying. Always keep in mind, your goal is to collect the rent, have the tenant take care of your place, and renew their lease. If all these things happened without effort or aggravation there would be no money in owning rental properties or Tampa property management.
The author, David Lowrey, owns and operates a successful property management company in Tampa, FL. He also is a very successful real estate investor purchasing more than 60 rental properties over the last 12 years. In 2004 and 2005, one of David’s companies, Apartment Express Corporate Housing, made Inc Magazine’s Inc 500 List for the 500 fastest growing privately held companies in America.
Please feel free to visit his website and Tampa Property Management or http://www.novacancynow.com.
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