Do you appreciate your tenants?
I mean really appreciate them. Most tenants expect a clean and safe place to live, without too much interference from the neighbors, owners, or managers. Most landlords can do this, but can you do more? Do you have to do more?
The answers to these questions are simple. The market is very competitive, only about 20- to 30- percent of the national housing stock are apartments. The rest of the housing stock is made up of single-family homes. If you don't create an environment for a tenant that makes it a great place to live, the tenants you have won't stay very long.
You would think that this is common sense, but many landlords believe that tenants owe the landlords more than rent, that they should be thankful for the roof over their head. In reality tenants are fickle, they will move to an apartment with a better landlord if you don't take care of them.
Build a community
It does not make a difference if you have 5 tenants or 100 for tenants to feel at home; you need to build a sense community. Have a party a couple times of the year. Encourage your on-site manager to have an Easter egg hunt (in a family-oriented property), or to organize a book club, or a baking group that meets once a month.
Create opportunities for the tenants to make your property their home. If they're comfortable with it, encourage them to share phone numbers or e-mail addresses so that they can help with a security watch if they wish. Should you have tenants that travel a lot, encourage them to be involved in a buddy system so neighbors can watch each other's properties -- and yours.
Some people that don't want to be bothered. Fine. Instead, send them a couple of tickets to the movies or coupons for a pizza and a video rental. They will think they have won the lottery. It does not take much to make a tenant feel special, especially if they have rented someplace else, and the manger didn't even thank them for the monthly rent.
Speaking of rent, I am not asking you to be extra friendly with the tenants and let them defer the rent, and I am not suggesting that you to delay rent increases. Nor am I asking you not to enforce the property rules. These things need to be done, and done in a fair manner, without playing favorites. Tenants understand that renting is not free, and they want deadbeats and those who do not cooperate evicted.
So what does it mean to appreciate your tenants?
Just last week one of our clients mentioned that he buys holiday gifts ($20 gift certificates) for all of his tenants and sends them a letter telling them that he appreciates them. This is the tip of the iceberg. What is really important starts with your attitude. As an apartment owner you want to make sure that you or your on-site manager/management company respond quickly to tenant maintenance issues. Ranges need to work, so do refrigerators and the heat. The roof shouldn't leak and pests (any kind of bugs) should not be tolerated.
Think of these as some basis ideas that tenants will appreciate:
- Thank tenants for new tenant referrals.
- Create opportunities for tenants to meet crime prevention specialists or the police department.
- Make sure that the property signage and building and apartment addresses are easily visible to emergency vehicles for a quick response.
- Insure that the lighting at night works and that you have all the lights you possibly need. The trade-off in increased electricity expense is that tenants feel safe at home -- a more-than-fair exchange.
- Pay for a lease renewal with an improvement to a tenants unit, install fans, closet organizers, new Formica, or even a new paint job or carpeting for a long-term tenant. Remember: You're not losing a tenant and don't have the turnover and vacancy expenses. You can afford to do some things to keep your property up-to-date as a "thank you" for a lease renewal.
- Give the tenant a gift certificate for a nearby dinner to thank them for a lease renewal.
- Don't take your tenants for granted.
Finally, don't take your on-site manager for granted. A long-term employee who serves as an on-site manager also deserves to be recognized. Put yourself in their shoes. If your boss sent you away for the weekend because you have done a great job, wouldn't you want to come back and work even harder?
The average tenure of an on-site manager is between 1 to 2 years. If you can make that 3 years or more, I can guarantee that tenants will not move as often and owners will make more money. Constant management turnover creates nervousness for tenants. Give an onsite manager tickets for a play, pay for the baby sitter, send them out to dinner, pay them an annual bonus, send them a letter that tells them you appreciate them -- just don't take them for granted and your vacancy rate will drop.
Encourage the on-site manager to take care of the tenants and you should have a great property, one with rent can be increased every year -- as long as you don't forget to appreciate your tenants.