Happy renters are often long-term renters, and long-term renters make for happy property owners.
“We want to have pride of ownership and take care of the people living there,” says Nidhi Daga, Senior Vice President of Growth for Commercial Real Estate Digital at JPMorgan Chase and a multifamily investor with properties in California, Texas and Utah.
It’s an approach that can promote resident satisfaction — and boost your property’s bottom line.
When renters move out, dealing with turnover is “a double-whammy,” Daga says. “You’re spending a lot to get the unit ready for the next renter and find that new renter, and you’ve lost income because you’re not getting rent.”
To keep residents happy and limit turnover costs, consider these renter retention tips from expert multifamily investors and property management pros.
1. Communicate effectively — and on tenants’ terms
Both owners and renters benefit from open lines of communication, so pay attention to how tenants like to interact.
“Maybe they’re more responsive via text and less responsive if I call,” says Kim Avant-Babb, a real estate investor and co-founder of Babb Properties in the Philadelphia area. “Everybody communicates differently, and we have to pivot and be flexible.”
Promoting good communication also helps owners spot minor issues before they become bigger problems, says Avant-Babb. She tells residents she considers them “on-site property managers, who are part of our team.”
2. Address issues promptly
Respond quickly when renters raise issues at their unit, like a leaky pipe or broken appliance.
“You wouldn’t want to not have access to a fridge for a day or two,” says Daga. “It affects how residents operate and live in the home.”
To be able to fix problems quickly, have a robust list of reliable contractors and maintenance professionals in place. Daga also recommends asking the renter for photos and a detailed description of the issue to help find the right solution as quickly as possible.
Responsiveness is also important in less urgent situations, like when a renter asks to repaint walls or make other improvements. Even if you turn down the request or have them cover the costs, responding quickly and doing what you can to help approved projects move forward will help keep the relationship smooth, she says.
3. Invest in amenities that encourage residents to stay
Offering in-demand features that are tough for residents to give up can boost retention, especially if those amenities aren’t widely available in your neighborhood.
- In-unit laundry: “The No. 1 feature that people love, and pay more for, is the ability to have a washer and dryer in their personal unit,” says Ashley Wilson, who owns and operates large multifamily buildings in Texas, Missouri and Ohio as co-founder of Bar Down Investments.
- Dedicated parking or transit perks: In areas where parking is scarce, access to a dedicated parking space can be a big draw. If your property lacks parking but is close to bus or train routes, you can consider offering transit coupons, says Vickie Gaskill, owner of Washington-based property management company Bell-Anderson & Associates and an instructor for both the Institute of Real Estate Management (IREM) and National Association for Residential Property Managers (NARPM).
- Outdoor space: Many renters — especially families — look for properties with outdoor space, Daga says. She doesn’t typically provide outdoor amenities like a basketball hoop or volleyball net, due to concerns about liability, but letting renters install their own can be a good perk.
- Be pet-friendly: Searching for rental housing can be tough for pet owners. When they find apartments that welcome furry friends, they tend to stick around 21% longer, according to a 2021 report from the Michelson Found Animals Foundation and the Human Animal Bond Research Institute. Read four tips for smart ways to appeal to pet owners.
4. Offer affordable updates
Consider showing longtime residents your appreciation by putting some of the money the property saved on turnover into unit upgrades, like a fresh coat of paint, new appliances or free carpet cleaning, Gaskill says.
To get ideas for updates that’ll have a big impact, ask renters what’s on their wish list, says Juan Huizar, Sage Real Estate president and broker in Long Beach, California. When a family with a young child wanted a lawn, he replaced the unit’s drought-tolerant landscaping. He’s also installed ductless mini-split air conditioning systems, which let renters better control the temperature of individual rooms in their home.
“I’d rather spend $1,500 on something that makes the tenant happy than spend $10,000 renovating the unit for a new tenant,” Huizar says.
5. Keep rents fair and streamline payments
When considering raising an existing resident’s rent, weigh the costs and benefits. If higher rent pushes a resident out, turnover costs could eat into the additional income an owner would see, so it’s smart to be flexible, Daga says.
She also recommends making it as easy as possible for residents to pay their rent by offering multiple options, including automatic and online payments. Learn more about how Story’s rent management tool can streamline payments.
6. Assess renewal plans early and consider incentives
Offering renters a lease renewal letter well before their current lease expires helps everyone plan ahead. It can also help you figure out whether you need to offer incentives or make other changes to prevent turnover.
Wilson typically issues a renewal letter 90 days before a lease expires and sometimes offers financial incentives for people who renew early going into the winter slow season, when it can be harder to fill vacancies.
“Some may argue you don’t need to do this because the tenant may renew anyway, but you don’t know for certain whether they will, and it saves our staff time if they renew right away and we can lock up the leases,” she says.
Some move-outs are inevitable, like when a renter relocates or needs more space for a growing family. But these tips for minimizing turnover can keep both you and your residents happy.
By Lauren Zumbach from Story by J.P. Morgan
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