7 Tips For Increasing Tenant Retention Rate

Real Estate Business Review | Thursday, February 10, 2022

Being overly aggressive with rental rate increases may steer tenants away from your property.

FREMONT, CA: Seeing a low retention rate for your rentals may seem discouraging. Still, there’s often room for improvement.

Following are a few considerations if you’re trying to increase your tenant retention rates.

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Keep Rate Increases Fair and Consistent

Most probably, one of your main goals in owning rental properties is earning profit. As a result, you’ll sometimes find yourself increasing rental rates to keep up with the competitive market. Still, if you are overly aggressive with rental rate increases, it may steer tenants away from your property.

Instead of automatically growing your rates at each lease renewal, do market research and justify your rate increases. Generally, investors should keep rates below market rates and implement smaller increases over the years.

Offer Incentives for Lease Renewals

The end of a present tenant’s lease is essential for landlords. But finally, you want your tenant to renew their lease and remain in your rental property for another term. One way to encourage tenants to renew their leases is by offering incentives.

For instance, you could consider collaborating with other companies to give promotions or deals for tenants. If not, you could provide monetary incentives like a discount on the renewal month’s rent.

Screen Tenants Thoroughly

Opening with a thorough tenant screening is the first stage in finding quality tenants for your rentals. Retention rates will be the least of your worries without a tenant screening. That said, tenant screening is one of the most critical steps of the rental process, significantly impacting your tenant retention rate.

Before you enable an applicant to live in your rental property, you’ll want to check their income, run a background check, and meet some references. When you speak with tenant references, ask them open-ended questions that enable you to gain more information.

Previous landlords can give incredible insight into your potential tenants. Use this data to determine whether or not they would be a good fit for your property. 

Prioritize Maintenance

When you possess rental properties, maintenance is unavoidable. So, being proactive with regular maintenance tasks can avoid emergency repairs in the long run. Apart from keeping your property in good shape, regular maintenance is a great way to increase your tenant retention rate.

When tenants have problems with a maintenance request, landlords or property managers should promptly address concerns. Also, keeping your tenant informed and updated will build rapport and better landlord-tenant relationships.

Stay Up-to-Date With Rental Markets

Following the trail of local rental markets is a big factor in retaining current tenants. One best ways to increase tenant retention rates is by monitoring local amenities and updates in the local market.

Remain Professional Yet Personable

Landlords are accountable for enforcing lease rules, local laws, and rental standards. For instance, most landlords have repercussions for late rent payments, damages, and other lease issues. Still, while you may have to enforce some lease rules, remain to understand certain tenant circumstances.

If one of your best tenants settles late or misses a payment, check in with them to see if any problems are preventing them from paying. If they’re lost their job or fallen from grace, consider working with them to find a solution.

Provide Outstanding Customer Service

One of the easy ways to increase tenant retention rates is by offering top-notch customer service. Although it is straightforward, it’s critical that your tenants feel heard and appreciated. Excellent customer service begins at tenant screening and move-in time, where you can offer your tenant all the necessary information. For example, give them a welcome packet, a summary of rental procedures, and your contact information.

When issues emerge in your rental properties, answering requests and complaints is vital as early as possible. Try to answer within the same business day and keep tenants upgraded with maintenance progress, so they know it’s being handled. Keeping sincere and effective communication with your tenants is a good way to establish fine landlord-tenant relationships.

Enhance Your Tenant Retention Rate With Property Management

If you’re undergoing a low tenant retention rate and are unsure what else you can do to raise it, consider recruiting property management. Recruiting a full-service property management team can raise your tenant retention rate and magnify your return on investment.

When you have a professional management team from your point of view, you don’t have to worry about the daily tasks of running a rental business. Bay Property Management Group can support tenant screening, move-in, and move-out reports, rent collection, maintenance, eviction services, and more. 

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