If you are reading this you are probably either an investor or someone looking to get into real estate investment.
For an investor, the three biggest issues that reduce your profit on your investment are downtime between tenants, paying in time, and maintenance.
Having an A-grade tenant can reduce the two issues significantly. Good tenants generally pay their rent on time, look after the property as if it was their own AND stay long term.
…But it’s a two-way street. Attracting A-grade tenants is one thing, keeping them is another. If taps start falling off the wall or the hot water system fails and is not attended to promptly even the best tenants can try to refuse to pay rent or even leave. Tenancy turnover can mean days or weeks where your investment property doesn’t earn you any rent.
So what can you do to attract and keep good tenants?
- Start with a neat fresh property.
To attract a good tenant firstly you must have a good product. A property with an overgrown garden that hasn’t been painted in a decade with a door off its hinges isn’t likely to attract a house proud/pay-on-time type of person… is it? The question you should ask yourself is “Would I have my family live here? If the answer is no then a longer-term plan around updating may need to be investigated. (See our other article on tips on updating a home for the long term)
- Address concerns and maintenance promptly.
One of the main reasons why a tenant vacates is the home itself. Let’s say the stove elements are broken or the hot water runs cold after a few minutes and it takes weeks to fix. The odds are that you would have a fairly high tenant rotation. Few things are more frustrating for a tenant than having unaddressed maintenance requests. You want to show them that you care and want to give them a nice place to live. This can be a big deciding factor when your tenant is considering a lease renewal.
- Consider what amenities tenants want.
For many tenants, especially younger generations like Gen-Z and Millennials, lifestyle quality is a major factor in whether they decide to stay or go. You may own the property, but the tenant should be able to consider it their home. There are ways you in which can help promote a more tailored atmosphere, and in doing so, it may encourage your tenants to stay longer. It’s important to know what factors today’s tenants are looking for in a rental property, so you can try to better meet market demand – some examples are:
- High-speed internet
- Air conditioning
- Hardwood flooring.
- Offer longer leases.
Remember you want a tenant to feel like it’s their home. Stability is key and offering longer leases can mean you reduce your vacancy. Whilst this may mean you cannot raise the rent the positives may outweigh the negatives.
- Be human.
Whilst property investing is a financial transaction, allowing a tenant to feel (without even meeting) that as a landlord you care and are trying your best to help them and their quality of life goes a long way to creating landlord/tenant loyalty. This reduces the chances of issues down the track (think non-payment of rent or destruction of property).
Remember it’s all about the screening. The better the screening process the better tenant retention. If you are looking for a Property Manager to take the stress out of managing your investment property and provide the highest standard of tenant screening in the Illawarra get in touch with our Property Management team and switch to us.