Reduce Tenant Turnover

High tenant turnover is pricey. Besides the loss of rent, you’ll need to invest in maintenance costs such as carpet cleaning, appliance repairs and painting to prepare vacant units for new tenants, says Jennifer Eschbaugh, with the multifamreduceturnoverrily housing division of Signature Worldwide in Dublin, Ohio. You also need to factor in marketing costs to attract new tenants, including advertising and resident-referral incentives.

Be Proactive
Don’t ignore your tenants once they move in, Eschbaugh stresses. “Your focus on renewals should start the day you sign a tenant, not when the lease is up. Constantly communicate with your residents to see what your staff can be doing better, and then act on their suggestions.”

Respond to Requests
In today’s fast-paced world, consumers want immediate answers. Respond to tenant inquiries within a couple of hours, providing a timeline of deliverables, says Eschbaugh.

Incorporate Quality-of-Life Features
Another way to reduce tenant turnover is improving tenants’ quality of life through design features. “By making tenants feel more at home, they’re more likely to stay longer,” says Florida architect Richard Jones. Jones offers the following design guidelines:

• Smaller units demand these design elements to prevent occupants from feeling crowded: an open floor plan, more windows to allow in daylight and create a view, outdoor spaces like porches, private front yards, a pocket-park, playground, gazebo or walking trail.
• Incorporate amenities like a catering kitchen, wireless Internet lounge, social room and game room.
• Create a resort feeling with high ceilings, clerestories and free-form pools.
• Make sure the floor plan is event-friendly, able to accommodate events like wine tastings, cooking classes and birthday parties.
• Pay special attention to the clubhouse: avoid overused themes like the Mediterranean look and opt instead for Tuscan, Provencal, Venetian and rustic German.

Preserve Property
Maintain your unit in a condition that matches the type of tenant you’re looking for, advises Clay Powell, director of the Rental Property Owners Association in Grand Rapids, Mich. “If you maintain a property that looks like it harbors criminals, it will probably attract criminals.”

Personalize Service
From management to maintenance, train your staff to deliver personal service, says Eschbaugh. “Hire the best employees to keep the best tenants, and reward your staff for every extra mile they go for your tenants.”

Treat your tenants very well, echoes Jason Hanson, author of How to Build a Real Estate Empire. “Send them birthday and holiday cards. If they’re late on their rent one month, but have usually always paid on time, give them a break and don't charge them a late fee.”

Provide incentives for tenants to stay three years or more, such as a month’s rent free, adds Hanson. For example, every time they renew the lease, give them a $200 gift card to Best Buy Co., Inc. “The biggest problem with high tenant turnover is that you will lose one to two months rent and also have to pay for paint or carpet. If you’re a knowledgeable landlord, then you can easily reduce tenant turnover,” Hanson says.

Adds Eschbaugh: “Make sure you know your tenants’ names, and keep a log of their interests, their children’s names and any additional information that is important to them. Smile and engage in personal conversations when you see them in the hall or parking lot. They’ll feel like a valued tenant and friend. Remember: When you receive a signed lease, you’re doing more than providing a tenant an apartment. You’re providing a home. Because home is a personal place, you must respond with personal service.”

With tenant turnover growing in recent years at many multifamily housing locations, personalization is more important than ever, points out Eschbaugh. “Tenants always are looking for a newer, more convenient property, and in these tight economic times, cheaper rent. Without forming a relationship or emotional bond with residents, which many communities have struggled with, tenant turnover will continue.”