Tenants can make or break the performance of your investment property. You've done well to invest in a residential rental, but the other half of the job is finding and keeping great tenants.
If you have bad tenants, your dream of earning a steady rental income might not come to pass. On the other hand, responsible tenants will keep you smiling to the bank.
You don't want to let go of such tenants, but they aren't going to stay long if you're not putting any effort into retaining them. Read on for some strategies, including leasing management, that you can use to keep great tenants in your property.
Find Great Tenants
You can turn an average tenant into a great tenant by being a good landlord, but that's not really a reliable method. The best way to have great tenants in your rental is by ensuring you're putting the best tenants there in the first place.
This will only happen if you're keen on tenant screening. When you check a rental applicant's criminal, employment, credit, and rental history, you'll have enough information to determine whether an applicant will become a good or problem tenant.
You can outsource tenant screening to a property management company if you don't have the time or expertise to vet rental applicants.
Put Tenants on a Lease
A rental lease is a legal document that, among other things, fleshes out the duration of tenancy. If a tenant signs a one-year lease, for example, they're expected to stay in the rental for at least one year.
Without a lease agreement, you're giving your tenants, including the best ones, an incentive to move out at the slightest thought. If there's a small repair issue at the property, for instance, a tenant can decide to move out immediately since there's no lease tying them down.
Offer Lease Renewal Incentives
A few months into a lease, you'll be in a good position to tell if someone has the characteristics of a great tenant. Prompt rent payments, communicating openly, and responding to property inspection requests are some of the top traits.
However, don't assume that the tenant will automatically renew their lease upon expiry. Renters are always on the lookout for better properties where they can get more value for their money.
This is why you need to offer lease renewal incentives to your best tenants. A rental discount is always attractive, but think long-term. Free property upgrades, like a bathroom/kitchen makeover, will make a tenant stay longer. Otherwise, there's always a landlord willing to offer a bigger discount on rent!
Effective Leasing Management Is the Key to Tenant Retention
Finding great tenants and being an awesome landlord goes a long way in keeping great tenants, but effective leasing management is what will seal the deal. Put your best tenants on a longer lease and offer lease renewal incentives when the time comes.
If you need help with leasing management, PMI Minneapolis-St. Paul has your back. We're a full-service, locally-owned property management firm that can take over all your landlord duties.
Contact us for more information.
