Avoiding tenant turnover is an important strategy in any profitable investor’s action plan. You want to keep your good tenants in place because when they leave, you’re not only faced with a vacancy, you’re also left paying for turnover costs, general maintenance, and the wear and tear left behind by the last resident.
How can you be sure your tenants are likely to renew their lease agreement when the time comes?
You have to provide such a fantastic rental experience that they cannot imagine leaving. Typically, that requires good communication, excellent attention to maintenance, convenience, and a general willingness to be a good landlord.
Here are five ways to avoid turnover and keep your Chicago rental property occupied.
1. Be Clear About Expectations
Good tenant retention strategies actually begin before your residents even move into your property. When you provide a move-in process that’s easy, clear, and stress-free, you’re already on your way to retaining tenants and establishing a good relationship with them.
Part of a good move-in experience is sharing expectations with your tenants, particularly when it comes to things such as:
Rent collection. Establish how much is due, when it’s due, how the rent should be paid, and what the consequences will be if rent is late. If you have late fees, be prepared to enforce them, and reinforce this to your tenants when you’re talking about rent.
Maintenance reporting procedures. You’ll want your tenants to be clear on how they should report maintenance needs, whether it’s an emergency repair that’s needed or a routine fix. Establish how they should contact you, and what they should expect once the request is received.
Rules and regulations. As you’re going over the lease agreement with your tenants, make sure they understand what’s permitted and what’s forbidden. You’ll want to cover parking, use of communal spaces, smoking, guests, and pets.
Talking about your expectations will make them easier to meet. The open communication and transparency will make it natural for tenants to trust you. Be open to answering their questions and be direct about how you want the rental process to go.
2. Provide Responsive Maintenance Policies
No one wants to sit through three freezing nights before you finally get someone to come in and look at the furnace.
One of the most effective strategies to ensure tenant satisfaction and increase retention is implementing responsive maintenance practices. Tenants who experience prompt and efficient maintenance are more likely to feel valued and respected in their homes. It alleviates the frustration that can arise from unresolved issues and contributes to a positive living environment. When tenants are satisfied with the service and attention they’re receiving from their landlord or property manager, particularly around maintenance, they are more inclined to renew their leases, reducing vacancy rates and turnover costs.
This is what responsive maintenance policies generally look like:
Easy Communication
You always want to be sure that tenants have a clear and easy way to report maintenance issues. You will likely have different reporting procedures, depending on whether they’re dealing with a routine repair or an emergency situation. Provide them with a dedicated email address, your cell phone number, or an online portal, which is what we use as Chicago property managers. Regularly check these channels and respond promptly to tenant inquiries and repair requests.
It’s always a good idea to keep tenants informed about the status of their maintenance requests. Regular updates, even if it’s just to say that the issue is being addressed, can reassure tenants that their concerns are taken seriously.
Established Maintenance Schedule
Implement a regular maintenance schedule for routine inspections and preventive measures. This proactive approach helps identify potential issues before they become urgent, allowing for timely repairs and maintenance. This will eliminate issues around pest control, for example.
Reliable Contractors
Build relationships with dependable contractors and service providers who can respond quickly to maintenance requests. Having a trusted network of vendors and professionals ensures that repairs are completed efficiently and to a high standard.
Prioritize Emergency Repairs
Not all maintenance issues are created equal. Establish clear guidelines for what constitutes an emergency repair, such as plumbing or heating failures, and prioritize these requests to minimize tenant inconvenience and discomfort. You don’t want your tenants calling in the middle of the night to report a clogged garbage disposal.
3. Offer a Pet-Friendly Property
Are you allowing pets in your property, or at least considering them?
You should be, if you’re hoping to increase tenant retention. There are a lot of benefits to allowing pets. Not only will you reduce your vacancy (the large majority of tenants in the Chicago rental market have at least one pet), you’ll also reduce your turnover. That’s because most tenants understand that it’s not always easy to find a rental home that allows them to move in with their furry family members. If you’re allowing it, they’re going to want to stay in place so they don’t have to look for a new home that will accommodate their entire four-legged family.
There’s also the matter of pet fees. If you charge a pet fee for tenants to move in with their animals (and you should), those tenants won’t want to pay another pet fee after the lease ends.
We understand that allowing pets can be risky. However, if you’re willing to put together a strong pet policy, do some extra screening, and open up your property to pets, you’ll find that you have a more successful time retaining those pet owners. And, they typically make good tenants. People who care about their pets tend to care about their homes.
4. Be Reasonable With Rental Increases
Most tenants will expect that the rent is going to increase when they renew their lease agreement. This is not unusual. As long as the market supports a rental increase, you should feel good about increasing the monthly rent when you approach your tenant at the end of their lease term.
However, you don’t want to be unreasonable.
If you raise the rent too much, you’ll potentially chase a good tenant out of your property.
Do the same thing at renewal time that you did when you initially priced the property. Study the market. Look at what the competing rental homes are charging in your neighborhood. Consider what your property has to offer that those other properties do not have.
When you conduct your market research or review the data provided by your Chicago property manager, think about where you want your rental increase to land. If the data you collect indicates that you can safely raise the rent by $150 per month in order to stay within the market, perhaps only raise it $125 per month. This will demonstrate to your tenants that you value their residency, and you want to keep them in place.
It doesn’t hurt to communicate the reasons behind your rental increase, and even to show them the numbers that you’ve collected about the average rental rates in the area.
It also doesn’t hurt to offer an incentive at renewal time. Yes, you’re raising the rent, but perhaps that will seem less difficult to digest if you can also offer a fresh coat of paint or a professional carpet cleaning. Maybe a new appliance if something has been malfunctioning or aging.
5. Don’t Be a Jerk
We shouldn’t have to say it: don’t be a bad landlord.
Every tenant has a horror story about the landlord who was rude, impossible to reach, or willing to show up at the property unannounced.
Don’t be that landlord.
Tenants will be in a hurry to leave your property at the end of the lease agreement if you make things unpleasant or uncomfortable. Don’t be confrontational or difficult to communicate with.
When you are attentive to good communication, excellent customer service, and willing to be an active listener and a problem solver, you’ll find that tenants enjoy renting from you. Therefore, they’ll be eager to stay in place.
Property Management and Tenant Retention
You might be surprised at the impact that professional property management can have on your rental property retention rates. Tenants often prefer renting from professional management companies. They know we have systems in place for everything. They understand that they won’t be waiting for maintenance. The entire rental process will move along systematically, and they’ll have the professional support in place in case anything goes wrong.
As Chicago property managers, we take tenant retention very seriously. Our commitment is always to our owner clients first, but we’re always dedicated to serving our tenants, too. Happy tenants lead to happy landlords. Tenants who feel like they’re having an outstanding rental experience will be willing to pay rent on time, take care of the property, and respect the terms of the lease agreement. They communicate openly with us, appreciate the steps we take to provide a great rental experience, and renew their lease agreements when the time comes.
Let’s talk about how we can avoid high tenant turnover rates for your Chicago rental property. Please contact us at Paragon Property Management Group. We can share some of our best strategies that are designed uniquely for your rental property and tenants.
