Your tenants are the real “golden goose” that provide you with a monthly golden egg and your investment property is the nest that they stay in. Whether you manage your property(ies) yourself, are part of a rental pool with professional management in place or are an individual with property management in place – it’s important to keep your tenants happy and convert them to long term tenants, what I like to call residents.
I like using the term resident vs. tenant as it represents a significant difference in the way the resident and the landlord view the property. Generally, a resident considers their dwelling more like their own home, and with that comes pride in their home/your property. When I was a tenant (before I was a landlord), I found that when I was considered as a resident and treated with more respect I felt better, wanted to stay longer and also felt the need to treat the property with more respect – even though I was just renting. So as a landlord, it’s in your best interest to elevate how you view and treat long term tenants – they are your residents. Having quality long term residents can minimize wear and tear on your property, as well as reduce turnover and the need to advertise, interview and vet new tenants (thereby saving you time and money).
According to the Spring 2013 Landlord Newsletter, a recent study by Kingsley Associates, a leader in real estate research, found that tenants who are happy with property management are three times more likely to renew their leases. The study, also found that communicating first with tenants is one of the best ways property managers can increase tenants’ satisfaction. This is wise advice whether you are managing your own property directly or working with a property management company. Establishing a productive, positive relationship with your tenants, or ensuring that your property manager does so, is fundamental to taking care of your “golden geese”.
To help you achieve this type of relationship and reduce many of the issues and hassles associated with real estate investment follow my top 15 ways to keep your tenants happy:
- Establish a good relationship from the start: A clear rental/lease agreement supports a trouble-free landlord/tenant relationship. In addition to the monthly rent and utilities, your agreement should provide an explanation all rules, regulations and procedures that you require tenants to follow as well as what they can expect from you. Such an agreement might include who’s responsible for what in the event that repairs are needed, expectation about yard maintenance or other special features of your property. It’s better to be clear about expectations then make assumptions. Effective, clear and timely communication is the bedrock of a good landlord/tenant relationship.
- Have a comprehensive move-in package: It should specify how (phone, email) and when (what times and days of the week) tenants can contact you (or your property management) for non-emergencies (also define what is an emergency and non-emergency). It may be helpful to include key numbers for local emergency services, shops, etc. especially if your tenants aren’t familiar with the area. Michael Sarracini and Scott MacGillivray have a short video with some great ideas about how to welcome new tenants and establish a good relationship, including a helpful move in package.
- Answer the phone: If you’ve provided contact information and hours – be available at those numbers and during those times. It’s important to take your tenants’ phone calls and/or return messages within 12-24 hours. If you use professional property management, be clear about your expectation that they be available and responsive to your tenants.
- Be professional, not personal: In your direct interactions with tenants it’s very important to treat them as you would like them to treat you. Be polite. Listen to what they have to say. Your property is their home! Utilize a business attitude – remember customer service is an important part of the landlord role. Your tenants should be treated with respect – don’t gossip about other tenants.
- Respect your tenant’s privacy: Be sure to give proper notice before accessing the property for any reason other than an emergency. Try to establish one or two routine times per year for preventive maintenance inspections and the like, and include your requirement for such access in your agreement.
- Rent out a clean property: A clean, well maintained, updated and “move in ready” property is much more likely to be returned in that condition when tenants leave. Consider providing a voucher for one professional cleaning service session as part of your move in package.
- Take care of repairs/practice preventive maintenance: Be responsive and address requests for repairs and maintenance promptly. Work with your tenant to identify a good time to effect repairs. Consider appropriate upgrades or preventive maintenance that could be done at the same time as a requested repair. It may well save you time and money, and you’ll have a tenant who’s grateful for the “extra” customer service.
- Make cosmetic improvements: It’s fairly routine to make upgrades and improvements before a new tenant comes in, but it’s very important to remember your residents (long-term tenants) and offer them items such as fresh paint, a professional carpet cleaning or house cleaning session every two or three years. If you’re making significant improvements to some of your properties, be sure to offer them to your residents too, ideally on a schedule that works well for them.
- Safety first: Let tenants know when safety related repairs are being made or if you’re taking steps to prevent break-ins and theft. Tenants will appreciate your putting their safety first and the fact that you are keeping the property up to date.
- Provide supplies and essential equipment: If your property is other than a condominium then in the winter, ensure that tenants have easy access to items such as a salt bucket and shovels in the entry way or in a utility closet tenants have access to. You should still plan to shovel snow from sidewalks/property, but giving tenants access to such items permits them to salt down an icy path or dig out their snow-covered car. Your property may have unique requirements and while you or your property manager will typically take care of them, tenants, especially residents, may very much appreciate having access to basic supplies or equipment.
- Deal with disruptive tenants promptly: Respond to tenants’ concerns about other tenants promptly. You will have to use your mediation skills, but if you have obnoxious disruptive tenants and you don’t address the situation you could lose your good tenants.
- Be realistic when raising rents: It can be tempting to raise rents by the maximum legal amount, but offering good tenants a rent that is slightly below market rates can help retain them as long term tenants and this will save you turnover costs. Consider offering a longer term when good tenants extend their agreement. A note or a small gift to acknowledge their continuity as tenants will always be appreciated. Depending on the Tenancy Act in your property’s jurisdiction it may make sense to raise the rents to the maximum allowable percentage but provide a rebate back for signing a lease, for example rebate half or one month’s rent. It could help convert a good tenant to a resident.
- Ask your tenants: Offer incentives to tenants if they provide successful referrals for additional tenants. This may well save you time and money and should have the added advantage placing existing good tenants’ friends in the same building. Conduct an annual survey of your tenants – it should be quick and short and will provide valuable feedback as to what’s working, what could be improved in the property and what they’d like to have that isn’t currently part of the property. Provide an incentive for returning completed surveys – coffee cards work well!
- Show Appreciation: Everyone enjoys a gift or acknowledgment. Let your tenants know you appreciate them. A note or card for their birthday or Christmas is a thoughtful gesture that will reinforce your working relationship. Earlier I mentioned incentives like professional cleaning services, other items like a gift basket or special deals with local businesses are also effective ways to support tenant loyalty or to acknowledge a milestone. Local businesses will often provide a group discount when you purchase multiple items or services. Consider holding a holiday party or open house, this works well for larger multi-unit buildings and has the added benefit of tenants getting to know each other in an informal setting. Apartment Management Magazine features the results of a recent survey about what tenants consider effective incentives.
- Make things convenient: In a recent blog, Jennifer McCready noted “that we live in a very fast paced, technology-driven society, and people everywhere are taking advantage of these modern conveniences. Using tools like property management software that offers an online portal for tenants to use can help you get a leg up on the competition and keep residents happy.” Ted Karch suggests creating a community blog or online newsletter as good tools to support a better living experience for tenants. He also suggests utilizing direct deposit to make it easier for tenants to pay their rent. Think about what works for your tenants and for you, and will make everyone’s life easier!
These 15 tips will go a very long way towards creating a positive, constructive relationship with your tenants and establishing long term tenants.
However, even with the best of relationships it’s good to be prepared and have effective ways to approach dissatisfied and angry tenants. Jason Bischoff’s blog Keeping Your Tenants Happy: How to Deal with Angry Tenants offers some great insights. He has a straightforward, four-step system called HEAT to keep you calm and help you address angry tenants. HEAT stands for HEAR, EMPATHIZE, APOLOGIZE and TAKE ACTION. Jason talks about the importance of “active listening” and provides some great techniques to help diffuse a tense conversation. He goes on to talk about the importance of empathy, the impact of a simple apology and the necessity of taking appropriate action. I encourage you to take a few minutes and read his blog, it will help you see angry tenants as an opportunity to create loyal tenants.
To close I’d like to quote Scott MacGillivray the star of the TV show Income Property: “Treat your tenants right and they’ll treat your house right.” If you want to keep getting your golden eggs, then you need to take good care of your golden goose and help your tenant take good care of their nest/your property!