The most expensive and painful thing you have to handle while managing a property is turnover. The period of vacancy plus the cost to fill a vacant unit make keeping current tenants the much more profitable choice. You don’t necessarily want everyone to stay though – what you really want is a building full of good tenants – and that means knowing how to keep your good tenants.
Make rent collection a positive experience. If you use a web based program like Propertyware, this can be a simple process – just use the online tenant portals to allow easy online pay for your tenants. You can take this a step further by providing some quick training on how to use the online portal (either in person, or a video tutorial).
Carefully screening tenants is a given, but you can’t always be perfect in this area. Sometimes you will have a tenant who does not pay the rent on time – even with the good tenants. They may be unable due to financial issues, or they may simply have forgotten. Obviously you should enforce your rent policies, give them the time you say they have, and charge a late fee if necessary – but be pleasant about it. The easiest way to assure turnover is to get mad at a tenant who is already having a bad month.
Limiting turnover is going to be one of the biggest elements to assuring your success. As such, you should focus on this for every tenant, but identifying your best tenants can help you put extra focus where it can really matter. Keep a tally of who pays the rent on time, who lets you know when there are maintenance issues, and who takes extra care of their space (and the public spaces that they use).
One tool you can use to increase tenant retention is incentives. This can of course be in the form of rent reductions, concessions, or other deals that you might make (like free parking). Consider setting up other incentive programs for your tenants. This can actually be a great strategy for simply assuring you have on-time rent.
The best way to train behavior is through random positive reinforcement. Consider setting up an incentive prize drawing program every month for tenants who turn in their rent on the first of the month – this could be anything such as a gift certificate to a local restaurant (side note: you also add value to your local community with that) or simply providing $50 off their next month’s rent. For a direct monetary value prize, you want to consider two things: the value you get out of having more tenants pay their rent on the 1st, and the value in providing a positive rent paying experience for tenants.
The name of the game is simple: make your tenants happy, and they will stay (barring life changing events). When you don’t have to worry about turnover, your business will proposer.