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5 Ways to Improve Tenant Retention + Why It's Important

Juan Martinez • October 6, 2021

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Many landlords assume that, as long as they're able to keep their units rented, they're bringing in the money they need for their investment properties. The reality, however, is that retaining your tenants is often more important than bringing in new ones. In fact, bringing in new tenants can cost much more than you think!

Do you know how much you're losing on marketing and other strategies that will help you find new tenants each year--and how it may impact your bottom line over time?

Breaking Down the Math on Tenant Retention

Losing a tenant, even if you're quick to move new renters into the unit, can have a number of potential costs. Consider:

The average unit stays empty for around 1.5 months before a new tenant moves in.
You may need to take care of maintenance and cleaning costs on the property.
Customer acquisition cost isn't just for retail! It may cost money to bring in tenants--and you'll lose that much money each time you have to find a new tenant.
You may have to pay direct costs for bringing in a new tenant, including background checks, referral costs, or fees to your leasing agent.

Depending on the size of the unit, you may find yourself spending as much as $4,000-$5,000 just to bring in a new tenant. While that's not much for a tenant who stays in your property long-term, compared to the cost of rent that you'll bring in over that tenant's lifetime, it can add up substantially--and cut into the profits you're able to make on the property.

How to Improve Tenant Retention

Do you want to improve tenant retention on your properties? While not every tenant will stay forever, many tenants are looking for a place to call home long-term--and the right strategies can encourage them to make your property that long-term residence.

1. Address problems as quickly as possible.

When a tenant submits a maintenance request, how long does it take you to respond? Tenants who are routinely left with maintenance issues--especially those like heating and cooling, hot water heater needs, or appliance problems, all of which can cause substantial discomfort and inconvenience--will be more likely to move away from a property than those who feel that their needs are met in a timely manner. You can't stop things from breaking, but you can bring in someone to take care of any damage as quickly as possible. Having an experienced property manager take care of this for you can help ensure that you don't have to worry about being on-call all the time, since the property management company will always have someone ready to handle problems with the property.

2. Make it easy for your tenants to contact you, pay their rent, and take care of other tasks related to the property.

Whenever possible, make life easy for your tenants. Requesting maintenance should be as simple as making a phone call or filling out a form online--and tenants should trust that you will take care of that problem in a way that's as convenient for them as possible. Paying rent shouldn't mean having to chase you down, but rather should be as simple as writing a check or logging into an online portal to take care of the bills. The easier you make life for your tenants, the more favorably they'll feel about your property. Working with an experienced property management company can make this process much easier, since they will often have highly effective systems already in place.

3. Show grace.

If you have a tenant who routinely pays her rent on time, only to suddenly fall a couple of weeks behind on payments, show some grace and treat your tenant with as much respect as possible. While you certainly need to collect those rent payments as soon as possible, offer compassion about the reason for that late payment, and work with your tenant to get caught up, rather than simply insisting that you get paid immediately.

On the other hand, it's important to know the difference between when to show grace and when to see a lack of payment as a warning sign. Sometimes, tenants will say they're going to catch up on rent for months before the landlord realizes that they have no intent to catch up on their rent, and that he will have to kick them out anyway. Watch the patterns of tenant behavior to get a better idea of when you should show grace and when you need to act quickly to protect your rental property investment.

4. Pay attention to what your tenants have to say.

If you're concerned that you aren't retaining tenants as well as you might have hoped, consider going to the source to find out why. Is there something about your property that is sending your tenants away? Ask tenants in exit interviews why they've chosen to move on. Get a feel for what they want in their next property or what they're moving on to. Don't forget about your current tenants, either! Listen carefully to any tenant complaints or problems. Send out a survey to learn more about your tenants' needs. The more you know about their needs and preferences, the better you can answer them.

5. Create a respectful community.

Life in multi-family dwellings can be difficult when just one neighbor decides not to abide by the rules of common courtesy. Late-night parties, loud music, and slamming doors can all prove incredibly disruptive for other residents--and those residents may quickly move away in droves if those challenges aren't dealt with promptly. Create a respectful community where your tenants can trust that their complaints will be heard and dealt with quickly. Uphold quiet hours. Deal promptly with renters who show disrespect to others in the area. Often, those simple steps can help protect your existing renters by making them feel more comfortable on the property.

Keeping your existing tenants is an important way to increase your profits and save on your investment property expenses. If you need help with these strategies so you can spend less time searching for tenants and more time enjoying the benefits of owning that property, C21 is here for you. Contact us today.

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What Does a Property Management Company Actually Do? Behind the Scenes Look

November 26, 2024

A lot of people think property managers just sit back, relax, wait for the phone to ring, collect rent, and that's it. My name is Jorge Rodriguez, president of Americana Property Management in Las Vegas, and I want to show you what really goes on behind the scenes in property management. Should You Hire a Property Manager? Whether you own one property or twenty, there comes a point when managing everything yourself becomes overwhelming. At Americana Property Management, we typically help owners who: Own multiple rental properties and can't keep up with all the demands Live far from their Las Vegas investments Want their rental income to be truly passive Don't want to deal with hiring maintenance staff and contractors Can afford to invest 8-12% of their rental income into professional management The cost of property management isn't just an expense - it's an investment in protecting your property and maximizing its value. Let me show you exactly what I mean. How We Protect Your Investment A lot of owners don't realize how much liability they take on when they self-manage. At Americana, we: Stay current with all landlord-tenant laws Use legally-sound lease agreements that protect your interests Handle evictions professionally when needed Document everything to protect you from false claims Maintain detailed records of all income and expenses Take care of tax documentation Most importantly, we act as a buffer between you and your tenants. When there's a challenging situation - like late rent or lease violations - we handle it professionally so you don't have to be the "bad guy." How We Find Qualified Tenants The number one thing is making sure we find a qualified applicant for your home. At Americana Property Management, we market homes on over 50 websites, including: Zillow Trulia Realtor.com Apartments.com We also list properties on the MLS and work with other realtors to show our homes. We've found that applications from realtors tend to be better because the realtor pre-qualifies them before showing homes. Our Tenant Screening Process When we receive applications, we put them through a very strict verification process: Background checks Credit checks Rental history verification Employment verification Reference calls We want to make sure the person we're putting inside your home is going to pay rent on time and take care of the property. This verification process is vital to successfully managing your property. Once we complete the verification process, we always reach out to the owner with our findings and get their final approval before moving forward. The Move-In Process Setting Up the Lease We draft up a landlord-friendly lease agreement that protects everyone involved - the owner, the property management company, and the tenant. This gives us a legal binding contract that we all must abide by, preventing any misunderstandings in the future. Move-In Orientation Other property management companies might call this a move-in inspection, but we take it a little further. We: Document the condition of the home with pictures Demonstrate how the home functions, including: Where to shut off water if there's a leak How to reset breakers How to reset a GFCI How to relight a water heater How to change filters How to change batteries in smoke detectors and thermostats Ninety-five percent of work orders are very small and something the tenant can take care of. By showing them how during the move-in orientation, we save our owners money on unnecessary maintenance calls. How We Handle Day-to-Day Property Management Rent Collection We make sure rent is collected by the first of the month. Tenants have until the third to pay with no late fee - that's their grace period. On the fourth, they're charged a 5% late fee. If a tenant still doesn't pay rent, we start serving legal notices and ensure we follow through on our collection efforts. Maintenance and Repairs Tenants can submit work orders through our online portal - the same place they make rent payments. When we receive a work order: We inform the owner We dispatch our vendor to diagnose and repair the issue If the cost exceeds our approval limit, we contact the owner so we can make the right decision together Our vendors provide us discounts because of the volume of work we give them. These savings get passed on to our owners - you're getting highly qualified vendors for less than what you'd pay finding someone through Google. Working with Home Warranty Companies If you have a home warranty, we handle everything: Filing the claim Coordinating with the tenant Making sure the vendor goes out Following up to ensure everything is working properly HOA Violations If your property receives an HOA violation: For tenant-caused issues: We contact the tenant and ensure they fix the violation For owner responsibilities: We communicate with you, get bids if needed, and help choose the right vendor to resolve the issue How We Save You Money with Our Vendor Network One of the biggest advantages of working with a professional property manager is our vendor relationships. At Americana Property Management: We have trusted vendors for every type of repair and maintenance Our vendors give us significant discounts because of our volume We only work with licensed, insured professionals We know which vendors do quality work at fair prices We handle all vendor coordination and payment Think about it: When you search for a plumber on Google, you're paying retail prices and taking a chance on quality. Our vendors know they'll get consistent work from us, so they give us better rates - and those savings get passed directly to you. How We Keep You Informed We believe in complete transparency with our owners. Through our online portal, you can: See real-time updates on rent collection Review maintenance requests and approvals Access monthly financial statements Track property performance View all property-related documents Every month, you'll know exactly: How much rent was collected What maintenance was performed Any upcoming expenses or needs Your property's bottom line We take care of your property like it's our own, and we make sure you always know what's happening with your investment. The Lease Renewal Process We start the renewal process 90 days before the lease expires. During this time we: Compare similar properties to see if a rent increase (usually 3-5%) is justified Inspect the property to ensure it's being properly maintained Review the tenant's payment history We take all these factors into consideration before offering a renewal, and we always get your blessing before moving forward. Most of our initial leases are for one year. This gives us flexibility - if a tenant isn't paying on time or taking care of the home, we can give them a 30-day notice to vacate instead of renewing. However, when we do find good tenants, they tend to stay in our properties between 3 to 5 years. We really try to find long-term tenants so you can make consistent income from your investment. Looking for Property Management? Our main focus is making sure your interests are taken care of. You collect a nice check every month, and we handle all the headaches. If you have any questions about how we can help manage your property, you can reach us at 702-719-2100 or email us at pm@americanapm.com.