In a perfect world, every rental property portfolio would retain its tenants, holding a 0% vacancy rate for years on end. Although this lofty goal isn’t exactly realistic, practicing diligent management and upkeep of your rental properties will significantly increase tenant retention and the longevity of your portfolio’s success.
Whether you own one single-family rental property or 20 multifamily complexes, the profitability of your investment portfolio relies heavily on tenant retention. As a professional property manager, I’ll let you in on 5 essential strategies to achieve a high tenant retention rate for your Orlando investment portfolio.
1.) Accurate Rental Property Marketing
Property marketing transparency is an essential aspect of rental property success. Failing to provide complete transparency in your property listing sets unrealistic expectations and will most likely cause conflict and tenant dissatisfaction.
From the jump, your rental property listing will set the tone for your rental property experience. Some rental property owners and managers avoid transparency in their property listings in an attempt to conceal information that may deter tenants from the property. Although excluding details like a lack of working appliances or known mold presence may seem appealing, doing so will catch up to you rather quickly. Being that your tenant will eventually find out, it’s better to face the problem head on instead of jeopardizing your tenant’s satisfaction and risk health hazards or property damage.
Your property listing should include a thorough and accurate description of your rental property and its features. In addition to professional photographs and a virtual tour, I recommend including the following information in your property listing description:
- Accurate address and location description
- Monthly rental price
- Lease length and available date
- Deposit amount
- Square footage and number of floors
- Number of bedrooms
- Number of bathrooms
- Inclusion or exclusion of utilities cost
- Additional expenses
- Appliances included
- Parking
- On-site facilities and amenities
- Security features
- Unique features
- Air conditioning / heating
Most properties are leased in “as is” condition, meaning that what you see on the listing is what you get when you move in. What you include in your listing is what your tenants will expect, and wavering from that listing description does not typically go over well with tenants. To name a few examples:
- If you say lawn care is included, your tenants should not receive a $150 landscaping bill.
- If you allow pets but withhold information about a monthly pet fee until a month into the lease.
- If you claim the property is mold free but your tenants discover mold upon moving in.
Dishonesty and inaccurate listings not only set unrealistic expectations, leading to unhappy tenants, but will break the trust and respect your tenants have for you. Respect and trust are essential in a landlord-tenant relationship to promote tenant retention — many tenants would rather move than deal with a landlord they do not trust or like.
2.) Tenant Screening for Tenant Retention
Although tenant retention is a prominent goal for rental property owners, not all tenants are the most ideal candidates for a lease renewal. The goal of retaining tenants is to earn a steady cash flow, allowing you to build wealth and property appreciation. This can only be accomplished when your tenant is consistently paying rent on time and in full, and maintaining the condition of your property. Tenants who fail to pay or pay late, cause significant property damage, or constant conflict, are not the right kind of tenants to extend a lease renewal option to.
Implementing an in-depth tenant screening process ensures the reliability and financial stability of tenants. When filling vacancies in your Orlando rental property portfolio, it’s essential to keep longevity in mind. While filling a vacancy quickly is always top of mind, property owners and managers should prioritize placing tenants who meet a strict criteria. These tenants are the tenants you would want living in your property for multiple lease terms. At The Listing Real Estate Management, we say “It’s not about the fast tenant, it’s about the right tenant”. As placing an under qualified tenant often leads to missed rent payments, legal proceedings, or significant property damage, it’s more beneficial to hold out for a tenant who meets the necessary requirements to uphold their end of the lease agreement.
The most ideal tenants meet the following criteria:
- Credit score <550
- No past evictions
- Employment verification
- Sufficient and verifiable income, typically 3x the rental rate
- Previous landlord references
- Clean background screening
Though this criteria may seem strict, there are many tenants who do meet these standards. If you want the best for your rental portfolio’s success and retention rate, I highly recommend holding your applicants to these standards.
3.) Maintenance and Property Upkeep
Have you ever lived in a Florida rental property where the air conditioner goes out on a beautifully scorching hot day? Or your refrigerator went out, causing you to lose the $200 worth of groceries you bought recently? If so, think back to how you felt. Did your landlord address the issue right away? If not, you probably weren’t too happy about it — you might’ve even made negative remarks about your landlord or property management company.
We all know maintenance issues are bound to happen, it’s inevitable that an appliance will malfunction, maybe a small leak will occur, or the garbage disposal will back up. However, what makes the difference between a “good” and a “bad” landlord is how the issue is addressed and resolved. As a landlord or a property manager seeking a high tenant retention rate, it is essential to address maintenance issues with urgency and care.
According to a study done by LendingTree, 58% of renters reported having a bad landlord. Of those people, 68% attributed that dislike to maintenance issues. Being that maintenance issues are one of the leading causes of dislike towards landlords, likely hindering tenant retention rates, it is essential to diligently address maintenance issues when they arise. If the lease agreement states that the landlord is responsible for maintenance and repairs, you will be held accountable and expected to do so.
In addition, conducting preventative maintenance and quarterly inspections can save you money, time, and decrease the risk of serious malfunctions throughout your tenant’s lease term. Preventive maintenance can include cleaning gutters, HVAC servicing, checking smoke detectors, dryer vent cleaning, cleaning sink drains, and servicing appliances. The more you do to ensure all aspects of your property are functioning to the best of their ability, the more likely your tenants are to renew their lease.
4.) Communication and Addressing Tenants’ Needs
Frequent communication plays a significant role in tenant satisfaction and retention. As a rental property owner or manager, you have a commitment to providing a safe and happy living environment to your tenants, and a large part of that is reliable communication. Does this mean you have to check in with your tenants every day and see how they’re doing? No, however, there should be an established system of communication that your tenants can rely upon to easily communicate problems or concerns.
Many landlords and property management companies will use an online tenant portal, making communication straightforward and efficient. At The Listing, our tenants can submit requests through their own online resident center portal. Like an email, resident portal requests have a subject line, category, description, and attachment sections. We encourage tenants to submit photos along with their maintenance requests for clarification on the issue at hand, allowing for a quick and efficient solution.
From the beginning of the leasing process, through the tenancy, tenant requests and inquiries should remain a top priority and be addressed as soon as possible. Communication doesn’t just stop once the lease is signed; managing a rental property is a full-time commitment and communication responsibilities continue up until your tenant moves out. Whether it’s a question about where to take the garbage, or a maintenance request for a malfunctioning washing machine, all requests should be treated equally and acknowledged within a reasonable time frame.
Providing your tenants with an open line of communication and acting upon all inquiries promotes comfortability and a safe living environment. Having a professional and reliable relationship with your tenants increases the likelihood of successful lease renewals. Establishing trust is of utmost importance as providing a safe space for your tenants is essential for tenant retention.
5.) Hire a Property Management Company
A property management company can be an asset to your rental property’s tenant retention rate. Many rental property owners do not have the expertise or time to devote to overseeing all daily operations of their investment portfolio. While managing a rental property can seem like a simple process from an outside perspective, property owners who lack knowledge of the essential elements of property management may have a difficult time.
Your tenants’ satisfaction doesn’t depend on a beautiful home, or one free month of rent. While these two incentives will attract tenants, retaining them relies on factors such as transparency, maintenance upkeep, and clear communication. If you’re inexperienced in the property management industry, or simply don’t have the time to tend to your tenants needs, hiring an Orlando property manager will take the weight off of your shoulders and increase your tenants satisfaction.
At The Listing Real Estate Management, our full-service property management is tailored to each individual property, allowing for a personalized and proactive approach. Along with a FREE rental analysis, our property management services include:
- Marketing and leasing
- Tenant screening
- Rent collection
- Maintenance and repairs
- Rental property accounting
- Rental management guarantees
Our team of experienced professionals know how to navigate all aspects of daily management, always doing what is best for your property. Whether it comes down to dealing with legal implications or hiring the best maintenance vendor, our property management company is highly connected and experienced in doing so. Your property manager should have your best interest in mind, which means caring for your tenants and promptly addressing their needs. To retain responsible tenants, management must be swift and efficient.
At The Listing Real Estate Management, our team goes above and beyond to promote tenant retention and low vacancy rates. With our in-depth tenant screening process, we only place tenants who meet a strict criteria, making for ideal lease renewal candidates.
We call Orlando, Florida home, and as a boutique property management company, we take pride in knowing each rental property portfolio that we manage throughout Central Florida. We’ll ensure your investment portfolio of rental properties is maintained and thriving throughout your rental management experience. Contact us today at The Listing Real Estate Management to experience the difference in high tenant retention rates for your investment portfolio.
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