Getting and keeping tenants who will renew or sign a longer lease helps property investors increase their bottom line for both time and money. A low turnover rate eliminates much of the work involved as a landlord. Combined with the steady shift away from home ownership to rental housing from 2005 to 2015, it’s possible to attract long term tenants who will stay in place given the right property and leasing conditions.
How to Attract Long Term Tenants
Incentives are another way to encourage new and existing tenants to renew their leases or sign up for a longer term from the start. Considering the costs associated with vacant property, it makes financial sense to offer something in return each year for a long-term tenant.
As an investor, keeping the incentives limited to property improvement creates a win-win for both you and the occupant. Appliance replacement, new flooring or paint, or landscaping projects are durable improvements that may not increase the home’s value immediately, but will make it easier to rent or sell in the future. Try to build consensus about which home improvements the family would like, and within reason, give them options about the materials.
See also 5 Things that Boost a Rental Property’s Value
Be generous about pets if possible. According to the American Veterinary Medical Association, 36 percent of households have 1.6 dogs and 30 percent have 2.1 cats. Single family homes more easily accommodate pets, as do those with hard surface flooring throughout.
Pet policies can be restricting and owners often find themselves limited to the availability of rental units that will accept one, much less two pets. If you’re looking for a long term tenant and homeowner association (HOA) policies permit, consider making your property pet-friendly.
If carpet replacement is out of the question, increase the cleaning deposit, and if dogs are allowed, add a deposit for the yard. Stipulate that the deposit will be used for the damages the pets create, or to pay for specialists to clean the carpets and walls. If money is an issue, offer to spread deposit payments over a few months.
Eliminate Reasons for Moving
Unless you’ve lived there yourself, it’s hard to know just what your property is like at night. Darkness might change the livability of the home with regard to:
- Street and traffic noises. Sounds from the street and nearby roadways always seem to be louder at night.
- Outdoor lighting. Street or exterior security lights might shine brightly through windows.
- Indoor noises. The HVAC system might be uncomfortably loud in rooms near the air handler or the outdoor condenser. When all is quiet in the home, plumbing noises could be more apparent.
- Vermin. Bugs inside and out tend to come out after night falls and temperatures cool. Some people find even harmless insects and spiders repulsive.
Affordable remedies for any of these issues include:
- Black-out curtains
- Regular spraying by an exterminator
- HVAC and plumbing issues involve the services of a professional. HVAC pros can build a sound-dampening fence around a condenser, or replace the motor inside the air handler with a quieter model. Plumbers can investigate the cause of noisy pipes indoors and suggest a cure.
By tending to these issues and making repairs promptly, you eliminate common causes of dissatisfaction that tenants might experience with the home.
JWB has more than 10 years experience managing turnkey rental property investments. We have a consistent approach that delivers steady cash flow from our clients investment properties. Curious what your cash flow could be from one of our rental properties? Try our cash flow calculator or contact us to learn more.