Tenant turnover is one of the biggest downfalls of owning a rental property. When the cash flow stops from one lease, more investments might need to be made to find new tenants. There are ways that property owners could use to increase retention rates with each lease agreement. Whether properties are professionally managed or not, there are several methods for increasing the amount of renewed leases each year.
4 Ways to Increase Tenant Retention Each Year
Little compromises that can be made with each lease agreement could keep existing tenants happy. Not every tenant is ready to move out at the end of a lease agreement. Negotiating some key points before leases are terminated could help with renewals.
1. Upgrade Appliances
Studies have been performed by real estate marketing agencies that help landlords find out what perks renters would like to receive with renewed lease agreements. One of the most common perks that renters appreciate is an upgrade to all appliances. Not every investment home is purchased with new appliances.
By upgrading appliances that are near the end of their lifespan, existing tenants could agree to an extended lease term at the renewal time period. Kitchen appliances are often the most preferred types of units by renters.
2. Utility Incentives
Many renters who rent properties are either saving up money to buy a house, were previous homeowners or unsure if homeownership is the right option. Property owners could discuss utility incentives for renters to help with retention rates. Research studies have confirmed that the average person prefers cable television or satellite incentives compared to other utility assistance.
Negotiating a new lease and picking up the cost of cable or satellite television could be one incentive that helps to create an extended lease agreement. Most studies show that these cogitations can be completed just prior to the end of a lease term for best results.
3. Upgrade Flooring
The third most commonly used tactic to create better renter retention is upgraded flooring. Most flooring that exists in rental properties is not upgraded until damage occurs. Many renters appreciate new carpeting or flooring in areas like kitchens, living rooms and bathrooms.
Estimating the long-term value of new flooring or carpeting compared with an extended lease term could reveal if these upgrades are worth the investment. Making informed decisions as an independent property owner or through consultations with property managers is always best.
4. Reduce Monthly Rent
Decreasing the cost of monthly rent is the greatest demand for renters, according to most studies on the topic. While many investors prefer to raise rent to increase profits, long-term relationships can be built by reducing a portion of the monthly rent for extended leases.
A time period for rent reduction can be created to help please existing renters. Not all renters will agree to offered incentives although most property owners can find a compromise to increase long-term lease renewals.