In previous blog posts, we discussed the downsides of high renter turnover and offered a few ways you can deal with this process. Rental turnover can be a hassle for you especially if you’re new to owning and maintaining rental properties. After all, for every minute the property remains unoccupied, you’re losing potential revenue. Fortunately, as one of the leading providers of non-recourse loans, First Western Federal Savings Bank has plenty of experience in helping clients minimize renter turnover.
Let’s take a look at some of the steps and actions you can take in order to minimize tenant turnover in your rental property.
Make Your Home “Market-Ready”
One of the first ways you can minimize tenant turnover starts even before applicants look at the property. Inspect your rental properly thoroughly. Put yourself in the mindset of a potential tenant. Think about things like the condition of the fixtures and appliances, the state of the flooring, and the appearance and maintenance of the walls and ceiling. As you move through the home, create a to-do list of all the tasks that you’ll need to complete before you start marketing the space to tenants. Additionally, take photos or videos of spots of damage or things you need to work on.
In addition to repairing or replacing these items, make sure you deep clean the home. A great way to save money on cleaning is to do it yourself, but if you have the time, energy, or know-how then it’s best to hire a good cleaning service. Your cleaning list, however, doesn’t stop at simply your floors and countertops. It’s always a good idea to have an HVAC specialist visit your home and inspect your HVAC system. This ensures that your new tenants will be able to breathe easy as they spend time in your rental property.
Another great way to make your home market-ready is by upgrading parts and pieces to improve the tenant experience. For instance, consider asking for additional power outlets and cable tracks to some of the most used rooms like bedrooms, kitchens, and living rooms. “Smart” upgrades like thermostats and air conditioners are an attractive feature for potential renters. They minimize utility bills and are easier to use and maintain. Security upgrades for doors and windows, like keypad entry and alarm systems, are a high-value feature for some renters. The addition of new, energy-efficient appliances will save you and your tenant’s money on utilities in the long run. Upgrades like these can go far in retaining a tenant.
Screen Your Applicants Thoroughly
Once your rental property is market-ready and you begin your marketing efforts to find a tenant, you can start screening your applicants. It’s best if you can meet the applicant in person, seeking a sense of how they might interact with you in the future. As part of your screening process, make a background and credit check a part of the application. This is a great step to ensure that your tenant will be able to pay rent on time and stay on the property for a longer period of time. This will also minimize the number of short-term renter problems you might face.
When screening your applicants, consider aspects like these:
- Is the applicant’s income at least three times monthly rent?
- What do their employment and rental histories look like?
- How did their former landlords feel about them and would they rent to them again?
- Are they polite, respectful, and prompt in their communications with you?
- Do they have personal references who are happy to endorse their character?
A Little Incentive Can Go a Long Way
An effective way to minimize tenant turnover is to offer benefits, perks, or price adjustments for those who agree to a long-term lease agreement. Many renters will jump at the chance to have discounted rent in return for signing up for a multi-year lease. Other strategies are to freeze rental prices for a period of time after the lease ends. Many tenants are more likely to agree to stay in the property for a longer period of time if they can reliably predict what the long-term costs staying there will entail.
Be Prompt about Your Responses
You trust your tenant to care for your property while they stay there and they trust you to take care of them when they need it. When your tenants contact you with a repair request or to respond to an emergency, you should do everything in your power to address the issue as soon as you can. It’s always a good idea to have a list of trusted repair specialists that you can refer to when your tenant might experience things like air conditioning problems, plumbing issues, and more. By responding to the requests and issues in a timely manner, your tenants think of you more highly and are more likely to state your property for a longer period of time.
Make Them Feel at Home
For those managing a multi-family property, creating a sense of community across your units is a great way to minimize tenant turnover. It can be as simple as inviting your tenants over for dessert during the holidays, or something as elaborate as organizing a community improvement project. In the same vein, take some time to get to know some of your tenants. Showing that you are invested in them as people as well as renters is a great way to establish rapport. It also encourages them to come to you with problems like noisy neighbors, damaged appliances, or leaky roofs. When tenants feel at home in their rental, they are more likely to cooperate with you to help you care for the property.
Find Your IRA Non-recourse Loan Today
Whether you’re looking to invest in vacation rentals, singular multifamily properties, or commercial real estate, the lending specialists at First Western Federal Savings Bank can help you do just that. We offer self-directed IRA non-recourse loans. You can get your IRA non-recourse loan by contacting us today and starting your application now.