If you’re a real estate investor with rental properties, vacancy is one of the biggest threats to your profitability. Of course, the best way to prevent vacancy is to have tenants who renew their leases. This avoids even a short-term period when you’re not collecting any rent, which is inevitable when a tenant moves out. So, here are some pointers to increase rental property renewal rates.
How to Increase Rental Property Renewal Rates
- Provide responsive customer service. Sometimes, landlords lose sight of the fact that their tenants are also their customers. If tenants have trouble or extended waits to get things fixed, or if they have difficulty getting timely responses from you, they will be unhappy and much more likely to move out. Be professional and pleasant to deal with, and you will certainly increase your rental property renewal.
- Take feedback to heart. If you hear reasonable complaints, suggestions, or requests—especially from multiple tenants—give them fair consideration.
- Ask for feedback. Of course, feedback is only valuable if you get it. Check in periodically with tenants and ask how things are and if they need anything. Also, ask for feedback when tenants do move out. You’re more likely to get useful responses if you ask specific questions, such as what they liked most and least about living in the property, how they found it dealing with you or your property manager, what changes they think would be of benefit, why they’re moving, if anything might have convinced them to stay, etc.
- Offer renewal incentives. This is one of the simplest, most effective ways to increase rental property renewal rates. They can be a discount on the first month’s rent, a gift card, cash, or even something like a new TV if the rent is high enough and the tenant is a good one. Often, tenants are on the fence about renewing or moving out, weighing the potential upsides against the cost and hassle of moving, and it doesn’t take much to tip the decision one way or the other.
- Raise rent the right way. Consider building in smaller, regular increases at the end of every lease term, rather than having less frequent, larger increases. Tenants are much more likely to accept a minor increase than a significant jump. At the same time, be cautious about raising rent when the market rates don’t support it. Here are some more thoughts about raising rent to help you with the issue.
- Add value during the tenant’s stay. If you upgrade a rental property while a tenant is there, they’ll feel better about the place—and about you. Replace an older appliance or flooring, add an amenity, or just make some cosmetic improvements.
- Accept pets at your rental properties. There are a number of compelling reasons to let your tenants have pets. And yes, among them is that it helps increase rental property renewal rates. There are various reasons for this, such as the fact that pet owners tend to be more stable in their lives, pets make a place feel more like “home,” and renters with pets usually have more difficulty and greater expense when moving.