Turning over a property from one tenant to another is almost never easy. It can be a time- and money-consuming task, and there is always the possibility that the property will remain vacant for a period. The rent payments stop, but the expenses continue, chewing into your bottom line. You will always lose tenants. People’s situations change, they buy houses of their own, their job situations change. You can’t prevent that. What is foolish is losing a good tenant because of factors you can control.
Why is it so important to keep a good tenant?
- With the tenant in place, you know what you have. You never know what you are going to get when you have to find a new one.
- To find a new tenant, you will likely incur advertising costs.
- You will have to spend time qualifying and showing the property to new tenants.
- Damages to the property often occur when one tenant is moving out and another is moving in—furniture bangs up against walls, things get dropped, etc.
- Costs are usually incurred when turning over a property to a new tenant—for example, painting, new carpet, etc.
How to Keep Good Tenants
Here is some sound landlord advice on keeping good tenants.
The tenant must know that if there is a major problem, you will be responsive and handle it. If it is a minor problem, they need to handle it themselves or wait until you can do it. If the rent needs to be raised, call them and let them know rather than just sending an impersonal letter (although you will need to follow up the phone call with information about the increase in writing).
Firmness but Understanding
Tenants must know that rents are absolutely due on the first of the month. If there is a bona-fide problem (a medical emergency, for example) and if you are notified promptly, you must be understanding of the situation. But, tenants who have “problems” every single month need more firmness than understanding.
Gift baskets during the holidays or the use of your handyman for a few hours are the kinds of touches that help with tenant relationships. The cost is minimal but the potential benefits (retaining a good tenant) are large.
Continue reading through this section for more expert advice on real estate investing and landlording:
- Next article: Maintaining Your Rental Properties