Long term tenants and reducing tenant turnover are some of the most important factors for maximizing cash flow real estate investment returns. Of course, knowing this and making it happen can be two very different things. So how can buy and hold real estate investors effectively reduce turn over and increase total returns?
Reducing tenant turnover is important because it decreases expenses involved in fixing up units for new tenants again and again. Reducing vacancy, on the other hand, keeps cash flow returns more predictable. A combination of these two will make a buy and hold investor more successful in the long run.
8 tips and tactics to consider:
1. Better Property Management
It may sound obvious, but for many, it obviously isn’t. Reducing tenant turnover relies greatly on keeping tenants happy and efficient operations. What many aspiring and new landlords fail to realize is that even for a handful of rental units, it can take a whole team of different professionals to deliver a quality service. Besides the fact that it can save a ton of hard cash and time, it can go miles for increasing tenant satisfaction.
2. Gifts
Some professional property management firms recommend timely gifts for rocketing tenant happiness. This can be at Christmas, Easter, birthdays anniversaries and other holidays. It doesn’t have to cost much at all, but can make a world of difference when it comes to keeping a renter’s loyalty.
3. Flexibility
Flexibility has been becoming increasingly important in every facet and level of the real estate investing business. This is no less important or significant than when dealing with tenants. This does not mean giving people a free ride or failing to protect your legal interest and rights. But there will be plenty of occasions, especially around the holidays, when a little flexibility can go a long way.
4. Likability
Likability is a big factor in keeping tenants and can do wonders for making up for deficiencies and incompetency in other areas. Gone are the prehistoric days of the dictatorship. Make tenants like you and it will pay off.
5. Listen
A big factor in gaining likability and respect is listening. This doesn’t mean that landlords have to agree or bend to what they are hearing, but they do need to listen. At least make renters feel like they are being listened to.
6. Be Easy to Contact
Not being easy to get a hold of or contact can be one of the most infuriating things to a tenant. Note how many of the top and leading brands today are getting ahead by stepping out from behind the curtain to deliver better customer service and are becoming more accessible. Try it for yourself and see how much it helps.
7. Speed
Repair requests are going to come. They aren’t going to go away or get cheaper by being ignored either. So be fast in responding to them.
8. Make it Easier to Stay Than to Leave
This doesn’t mean holding renters captive, but if it’s easier and more comfortable to stay, the odds of them doing so are going to be much higher. Sometimes this may mean not overdoing the rent increases.
