We are surrounded by profitable investment opportunities, with real estate being one of the most lucrative. Even when investing in real estate properties, though, you must ensure each unit is managed correctly, or your profit margins will suffer. You may also find yourself unable to retain tenants. Property management companies excel in increasing tenant retention by performing timely maintenance, background checks, and maintaining clear lines of communication.
Over the past nine years, rental vacancy rates have decreased from year to year. In 2009, the rental vacancy rate was 8.9 percent. Last year (2017), the rate dropped to 4.5 percent. Property management companies have likely played a crucial role in helping property owners improve tenant retention.
In 2017, the main reason people cited for renting was that they could not afford to buy a home. 21.25 percent chose to rent because they needed the flexibility of not being tied to a mortgage loan.
If you're asking yourself, "can a property management company improve tenant retention?" Keep reading to learn more.
Find the Right Tenants the First Time Around
Improving tenant retention starts with finding the right tenants the first time around. All potential tenants should go through an extensive background check, and their income should be verified.
A property management company can verify employment and income information and assess whether a tenant can afford the monthly rent amount. An analysis can be conducted to determine if the tenant can afford potential rent increases. Tenants with a low credit score tend to pose a higher risk of not paying their rent on time. A thorough pre-screening process that includes a background check combined with obtaining a credit report is at the heart of finding good tenants.
Provide Easy Payment Methods
It’s much easier for a tenant to click a button from a computer or smartphone to pay rent than having to pay with a money order or a check.
Property management companies understand that accepting digital payments is key to improving tenant retention. Did you know approximately half of Millennials have never used a written check to pay for a product or service? With a San Antonio property management company, you can provide easy payment methods through an online portal. Tenants can access the portal on the go, making it simple to pay their rent even if it's last minute. The more convenient you make it for tenants to make a payment, the more they will enjoy renting from you, which translates into better tenant retention.
Prioritize Property Maintenance
You’re a busy person, especially if you have a day job or multiple rental properties. Tending to the maintenance needs of your properties is a full-time job in itself.
As a landlord, it’s your responsibility to keep all units in a livable condition and to perform maintenance on a regular basis. Your tenants understand maintenance is your responsibility, too.
A property management company prioritizes property maintenance, which improves material durability. When tenants see that you’re putting your best foot forward in maintaining your properties, it impresses and convinces them that the monthly rent payment they are making is well worth the money they are handing over. Regular, speedy maintenance makes the tenant feel valued, and it can lead to improved tenant retention.
Create a Killer Lease
You need a lease that is customized to protect you and your unique landlord needs.
There are lots of ways to create a lease. Probably the simplest way is to do a quick Google search, find a professional-looking lease, print it out, and have the tenant sign it. The issue with this, however, is that no two rental properties are the same and landlord-tenant laws vary by location.
A property management company can create a lease that improves tenant retention. For example: If your current lease states the tenant can break the lease at the risk of only losing their deposit, this isn't going to serve as a mitigating factor for vacating the property. If, however, it states the tenant will lose the deposit, pay a $150 broken lease fee, and have to pay the remaining amount outstanding on the lease upon vacating, this is going to deter the likelihood of a tenant moving out before his or her lease is up.
Analyze Local Trends
An Alamo Heights property management company has resources and knowledge to perform in-depth analysis of local real estate trends.
That knowledge allows you to gain valuable insight into tenant profiles. In knowing this information, the property management company can pinpoint strengths and weaknesses on your rental properties and align tenant profiles with the best-suited units.
Performing analysis also allows you to see in which areas you are lacking compared to other rental properties. You and the property management company can address any weaknesses by making proper improvements. For example: If other landlords provide a 10-day payment grace period and you do not, this could be a factor as to why you are not achieving high tenant retention.
Finally, a market analysis ensures the property management company is setting the perfect rental rate for your property.
There's nothing worse for a tenant than needing to get in touch with a landlord and not being able to. The truth is, though, landlords are busy. A property management company can serve as the go-to source for relaying information to the landlord. If you can't devote a regular work schedule to staying in communication with your tenants, it's usually best to hire a property management company who can offer immediacy in regards to communication with your tenants.
Being a landlord comes with a massive amount of responsibility that is directly correlated with tenant retention. Hiring a property management company takes the hassle out of collecting rent payments, performing maintenance, finding quality tenants, and addressing issues that cause tenants to vacate your properties.
Download our free Guide to Finding the Best San Antonio and Surrounding Area Property Manager for help choosing the right partner in property management for you.