By reducing tenant turnover, you can lower your maintenance costs, minimize listing fees, and avoid potentially weeks or months of lost revenue. But first you need to address the issues that cause residents to leave.
In this article, we explore the main reasons for tenant turnover before looking at the strategies you can implement to keep tenants happy. We’ll also look at a solution that allows you to detect and prevent noise problems before they impact your residents—one of the main causes of high tenant turnover.
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Tenant turnover costs can be significant. While the exact figure can be anywhere from $1000 - $5000 depending on the kind of property, $2500 is a typical cost of a single turnover. Here’s a breakdown of the costs involved:
Tenants coming and going is a natural and unavoidable part of property management. That said, it’s important to separate the issues outside of your control from the ones within it. Here are some of the main issues that you can influence:
At every stage of the tenant’s journey, you can implement strategies to reduce tenant turnover. Here we take a look at how.
A thorough and consistent screening process will help you select tenants who are less likely to cause issues or leave. But checking credit scores and criminal histories can take up a lot of your time.
With tenant screening software, you can run efficient, effective checks that encompass all the major credit reference agencies, criminal records, and rental history reports. What’s more, you can incorporate additional criteria, such as income validation and previous landlord references.
Frequently checking in on tenants after move-in means you can address any concerns they have about the property early. It also fosters a positive relationship and increases transparency, helping people feel valued as renters.
Implement a robust schedule for messaging tenants as well as organized systems for collecting feedback and taking action. You should also look for software with built-in messaging so you easily manage your communications.
It’s much less costly to catch maintenance problems early instead of being surprised by major issues upon move-out inspection. Implement regular inspections and a proactive maintenance schedule to get ahead of any issues. You should also use software to track and monitor maintenance requests and ensure no issues get missed.
Pro-tip: Use Minut to monitor your indoor climate and prevent issues like mold and flooding. Our devices constantly assess humidity and temperature levels.
Even with the best maintained home and most responsive management style, if a tenant’s neighbors are having parties or smoking in the corridor, they won’t be happy. Using privacy-first solutions like Minut to monitor noise and cigarette smoke helps you manage neighbors and bad behavior before relationships are damaged.
As soon as smoking is detected or noise goes beyond your custom thresholds, you’ll be notified and have proof of the event. This acts as a great deterrent and allows you to step in where needed.
Creating a real sense of community is a great way to increase tenant satisfaction and loyalty. Invest in areas like communal gardens or coworking spaces to organically nurture connections.
Alternatively, involve tenants more actively in events and decision-making. For example, with a tenant advisory board, your residents can voice their opinions, collaborate on projects, and help shape property policies.
Rent increases are part of the market, but the communication around them can often be the difference between a lease renewal and a turnover. Ensure there’s plenty of notice before any changes take effect, and provide clear, reasonable justifications for the increase.
You might have heard the term “feemaxing” in the property management space. While this act of systematically maximizing small fees might improve short-term gain, tenants are far more likely to leave dissatisfied so this approach isn’t worth it in the long run.
Offering incentives like discounts, amenities, or affordable upgrades to units can be a great way to encourage lease renewals.
Consider the cost of turnover and assess the appropriate incentive based on the unit. Examples can include offering a month of free rent, upgraded appliances, or a professional deep clean free of charge.
Requesting exit interviews with departing tenants is crucial to understanding what could have made them stay. This valuable feedback can help to refine management practices and reduce turnover in the future. Ensure these interviews are recorded so trends and patterns can be recognized and recurring issues resolved quickly.
By implementing the strategies we’ve outlined and integrating tools with your property management system, you don’t have to hope from afar that your tenants are enjoying your property.
Instead, you can screen through potential tenants automatically, check in on residents with a quick message, and send a notification to noisy neighbors in seconds.
By preventing issues from escalating, you can dramatically improve your tenant turnover rates and save $1000s across your portfolio.
Finding a new tenant will generally take between one and three months. This depends on factors like your local rental market, the location of the property, and your marketing strategy. Professional advertising and competitive pricing can significantly shorten this window.
The rental turnover rate is calculated by dividing the number of units turned over in a year by the total number of units in the development. Multiply this figure by 100 to get a percentage. This metric gauges the overall stability of the rental property.
Formula: Rental Turnover Rate = (Number of Units Turned Over in a Year / Total Number of Units) × 100
The turnover process generally starts with the tenant giving notice of their intention to not renew their lease. Upon leaving, a move-out inspection is conducted to identify any maintenance or cleaning requirements. Once these are addressed, the unit is readvertised and new tenants are screened. When the new lease agreement is signed and the tenants have moved in, the process is complete.
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