I have very little turnover in my rental properties. Hard to believe right? It’s true. I despise vacancies and high rental turnover in my properties and work very hard to keep them at a minimum. Rental turnover and vacancies costs time, money and potential problems with neighbors. And who wants that?
Most of my properties are at least 30 min to 3 hours away from my where I live in Texas and I have properties in two other states. Not a very large rent roll but enough to keep me busy and great supplemental income for fun stuff and retirement savings.
I find it easier and more cost effective to try to keep my best tenants for as long as possible. I developed a three part Tenant Retention Program and happy to say that it has been working for me the past 4 yrs. It consists of three main parts:
- I send out Rent Discount Vouchers or Coupons if they pay on time for the first 9 months. Nothing major. $5 to $15. They must take the time to fill it out and mail in with rent. (You can design and get about a 100 free using Vistaprint.)
- Every Thanksgiving/Christmas I have delivered a Poinsettia plant to their home. (Home Depot and Lowes always have them for under $2.00 around Black Friday).
- I send out cards of sympathy, new baby, etc…
- If they renewed their lease, in the 18th month of residing on property I send them out a company/resident T-Shirt I designed and get free using Vistaprint.
Once you connect with your Tenants – and I don’t mean be their friend – they tend to have a sense of loyalty towards their landlord and take better care of the property. Once you care, they will too!
- Lease renewals always initially go out 60-90 days in advance. I always provide a lock-in early discount.
- I never send out a 10 page lease. I send out a renewal “addendum” that extends the lease on file. Don’t want to scare them with paper work
- For my Multi-Family I always send out notices of “up-coming” major repairs
- Every spring I send out a “Tenant Feedback Survey” that covers how we are doing on repairs, rent rates, life-status changes and how content they are with their residence. I get about 1/3 of these back.
Communicating with tenants is always a great way show them that you care and very involved with your property. One of the benefits I ntoiced is that when it comes to late payments, change of life situations and repairs they are very eager to share in a honest and timely fashion.
In the annual tenant survey, I always ask about job security and family size. In 2008 I had a tenant that was living in a 4 bed SFH. Great tenants. Place was always immaculate and rent was always a few days late but included late fees. Could not ask for a better tenant. They came to me their own after living there two years and said :
“We love you as a Landlord and don’t wish to move but my mother-in law will be coming to live with us in 3 months and our lease will be up in 4 months. Do you have a bigger place for us to move?”
I was floored. I was thinking Cha Ching! I told them I did not have anything available at this time. Their response?
“We’ll stay and make it work with what we have. We really like you as a landlady and don't want to lose you”.
I told them I would keep my eyes open and put them on a waiting list.
A FSBO SFH in the same town became available 7 months later. I snapped it up using owner financing. Boy were they happy when I gave them the great news and told them that I would transfer their lease over and make only a modest increase in the monthly lease payment.
Immediately I began marketing their 4-bed SFH for rent and once they moved out, I had a new Tenant ready and waiting. No downtime, no rental turnover, no vacancy, no out of pocket payments on my end and happy neighbors because my property did not look abandoned with a for rent or lease sign out front.
Develop Your Own Tenant Retention Program
Doing all three of these things have cost me very little in terms of time and money but have benefited me 100 fold. I have Tenants that call or email when they will be late with rent, in need of repairs and giving me advance notice if they need to move-up, down or away.
Enjoy the benefits of avoiding high rental turnover and keeping your best tenants. Spend the time to develop your own little tenant retention mini-program and you will have more time to focus on doing deals.