Most landlords get into the business of property ownership to turn a profit, but the only way to successfully and consistently turn that profit is to maintain a steady stream of revenue. As long as your property is filled with paying clients at a reasonable market price, you won’t have to worry about it—but unfortunately, tenants don’t stick around forever.
Tenant turnover, the gap of time that occurs when one tenant leaves a vacancy, is one of the toughest challenges to face as a landlord, but if you handle this turnover in a clever and efficient way, you’ll have less vacancy time and a greater share of revenue for your investment.
Your first job is to prevent turnover wherever possible by finding good tenants who can pay rent consistently and keeping them for as long as possible:
- Choose the right tenants. Your tenant screening process should help you proactively identify red flags and avoid problem tenants before they occupy your property. For example, if you see a tenant has no consistent history of occupying a property, they may not be reliable payers, or they may jump from place to place frequently. Low credit scores, no work history, and general bad vibes in the interview process can also be red flags. Don’t be afraid to ask how long a tenant plans to stay in your place; it can be valuable information.
- Keep your property in good shape. Like you, tenants want to live somewhere nice. The nicer you keep your property, the more likely they’ll be to stick around. Keep the lawn mowed, the landscaping pretty, and the property in overall good shape—depending on the type of property you have, that could mean any number of things. If you’re ever concerned, ask your tenants directly if there’s anything else you could be doing to make the property livable. Going the extra mile could keep your tenants around for a few additional years.
- Address any concerns or issues immediately. No living situation is perfect; your tenants are going to have issues, whether it’s a broken appliance or a noisy neighbor. These will range from mild to severe and from chronic to urgent, but no matter what the case, it’s important to respond to these issues as quickly as possible. You won’t always be able to fix these complaints, and you won’t always have a perfect solution when you make the attempt, but merely acknowledging the problem and responding will put you in your tenants’ good graces.
- Be flexible. You don’t have to bend over backward for your tenants, but a little flexibility can go a long way. If your tenant is having trouble paying this month’s rent, consider giving them a break—a few hundred dollar loss for one month is much better than facing a vacant apartment for an indefinite number of months. Tenants also appreciate this flexibility and will be more likely to stay with you if you’re accommodating.
- Request ample notice. In the vast majority of cases, your tenants will eventually leave. The more prepared you are for this departure, the easier it’s going to be on you and your revenue streams. Accordingly, you should request ample notice—at least a month’s heads-up—when your tenant is ready to leave. You can stipulate this in the lease if you like, but be aware that this won’t always be possible.
When your tenant informs you that they’re leaving, it’s your job to accept this reality and start preparing for that departure.
- Run a pre-vacancy inspection. Before your tenant leaves, you’ll want to run a brief pre-vacancy inspection. This can help you identify key issues before your tenant is off the property, and help you understand what you’re working with. For example, if there’s extensive damage to your property, you can find a contractor willing to complete the repair work and prepare to withhold the tenant’s deposit to cover the damage. You can also make plans for any improvements you want to make.
- Work proactively. Don’t wait until your tenant is gone to start looking for new tenants. It’s in your best interest to work proactively, putting feelers out for potential occupants as soon as possible. This is especially important if your screening process will take more than a few weeks to complete.
- Update the property. Possibly before the tenant is gone, you can start making updates to the property. New appliances, new additions, and new paint jobs can help your property look newer and more appealing to potential tenants (not to mention increase what you can charge in rent).
Finding New Tenants Quickly
Once the property is fully vacant, your full-time responsibility should be filling that vacancy as quickly and as efficiently as you can.
- Price your property appropriately. There are a number of variables that should factor into your rent price calculation, so this may be difficult, but you need to price your property appropriately if you want it to move. You need to stay profitable, but you also need to remain competitive in your area.
- Use multiple channels. Don’t rely on only one channel to get the word out about your rental property; try using many different strategies simultaneously, such as paid advertising, social media, word-of-mouth, and classifieds. You can also host an open house, especially if you have multiple vacancies in one building.
- Work quickly, but do your research. For obvious reasons, the sooner you fill your vacant property, the better, so you’ll need to work quickly—but don’t just usher in the first interested person to come along. Do your research, and take your time to find a good tenant, rather than a filler candidate.
These strategies should be able to help you reduce tenant turnover, handle it better, and ultimately reap greater profits from your main properties. If you need additional help managing your properties, or you’re interested in adding new investments to your real estate portfolio, be sure to contact Green Residential for our property management services.