Tenants: How To Keep The Good Ones
Real estate investing is full of ups and downs but you want to focus on how to keep the worst stuff from happening to you. One of the key things to keep in mind to prevent bad things from happening are keeping your good tenants happy. Tenants can damage property and are notoriously known for setting up drug houses. So, let’s look at how to identify what a good tenant is and how to keep them.
What is a good tenant?
A good tenant:
- communicates with you
- pays on time
- pays in full
- doesn’t damage the property
How do I keep good tenants?
Many sites recommend having a rewards system in place. I’m not sure how well this would work if you pick a bad tenant to begin with. Tenants can be unmotivated in their life and and not have things steady or firm roots and might not realistically know if they can commit to their tenant agreement. I’m not sure how an annual gift card is going to change things when they are having trouble paying their rent. It’s a good idea; I mean rewards for good behaviour is positive and all. Try gifts for the holidays! I’m a firm believer that the most motivation that can come to the tenant is through good communication and relationship building - if they are a good tenant to begin with. You might need to hire a good property management company to put this in place. The other thing that you can do is setup an email list in MailChimp and remind them periodically of their potential rewards along with your newsletter. If they are good tenants, try a renewal incentive - be it whatever the tenant wants in the amount you can afford!
The idea with keeping the good ones is to spend more time taking in revenue from rents and less time with turnover. I guess it does boil down to good customer service - after all, your tenant is the customer and you are running a business; You have got to keep them happy. By maintaining the property.
Some say setting a standard for punishment - a late fee - is ideal for establishing a strong relationship with your tenant. Keeping consistent communication when late is recommended. On par with setting a standard for punishment is to include in the tenancy agreement that you report to a form of credit bureau in your jurisdiction to avoid late fees.
The next thing is, balancing rents with term of lease. Sometimes it can pay to accept slightly below market rents to keep a long term tenant and avoid turnover.
So, this comes to - How to keep a good tenant?
I think that the best way to keep a good tenant is to tenant screen for a good tenant in the first place. I heard studies show that you can keep good tenants for a long time that have been properly screened. Give that a try!
What has been shown to work when trying to keep the good tenants for you or that you’ve heard of?