How to Attract and Retain Reliable and Trustworthy Tenants
How to Attract and Retain Reliable and Trustworthy Tenants
Every landlord dreams of having long-term, reliable, trustworthy tenants who pay rent on time and in full. An even bigger dream is having tenants who clean up properly before moving out and leave all necessary repairs to the professionals.
Ideally, the dream is to secure honest tenants who don’t hide details that would change their lease terms. For instance, tenants who run a home-based business are more likely to cause damage in the process of making their goods. For this reason, many leases prohibit tenants from running a home-based business. Some tenants will hide their business, while others will be upfront and honest.
While securing great tenants with integrity is just a dream for many landlords, it can be your reality by employing the following strategies.
1. Set the tone for your relationship on day one
From the very first interaction you have, you are training your tenants how to be with you. If you want your tenants to honor their lease terms, you need to set the bar extremely high from day one.
For example, the first time you interact with a tenant will probably be a phone call asking if a unit is available or perhaps they’ll just submit an application online. Make these small interactions count. Be professional rather than casual and be firm with anything you tell prospective clients about rent prices, deposit amounts, rules, and cleaning fees.
If establishing a strict relationship with your tenants is difficult, hire a property management company. You won’t have to worry about anything. They’ll screen, select, and onboard tenants for you and they’ll handle all of their needs like maintenance and repairs.
2. Hold clients responsible for being on time
Not acknowledging when a tenant is late for a meeting will set a tenant up to feel comfortable with paying rent late. The truth is, most people are conditioned to be perpetually late. They don’t like to make or follow through with commitments. They want to maintain control to relax their way through life and do things on their terms.
Don’t set your tenants up to be lax about anything. Make sure they know you mean business. For instance, say you schedule a walkthrough from 2-2:30pm. Tell your prospective tenant ahead of time that being late will cut into the time available for the walkthrough and follow through. If they don’t show up until 2:15, don’t give them any extra time.
If you start making exceptions in the beginning of your relationship, even before someone becomes a tenant, you’ll train that person to know they’ve got wiggle room with your deadlines. This can result in all kinds of problems including using the laundry room after hours, blasting loud music late at night, paying rent late, and expecting to have late fees waived.
3. Reward tenants for amazing behavior
There are always fees and punishments for bad behavior, but what about good behavior? Find ways to appreciate good tenants. For example, if a tenant pays rent on time every month for 6 months, give them a $ 50-$ 100 discount on their 7th month.
A discount will be an incentive for them to continue paying on time. After a year of on-time payments, you could renew their lease at a discount for the entire year to come.
You could also reward tenants with a month of free parking, or a $ 20 gift card to Starbucks. The rewards you provide for your tenants are up to you. However, most landlords don’t reward their tenants, so even small efforts will be greatly appreciated.
When your tenants feel appreciated, they’ll be more likely to stick around even if they find a cheaper place to live.
4. Set your credit and income qualifications high
Some tenants with lower income can easily afford rent because they don’t have many bills. However, that’s not always the case. Since you can’t verify exactly how a tenant spends all of their money, it’s best to set high credit and income qualifications.
The standard minimum for credit scores is 650. Most landlords will not accept tenants with a score under 650. However, you can set the bar a little higher if you want.
When it comes to income, you want tenants who earn at least three times the monthly rent. You need to make sure your tenants have enough income to pay for their car, car insurance, cell phone, utilities, cable, internet, credit card bills, student loans, and whatever additional debts most people have today.
You will find tenants who are exceptions to these rules. There are people who don’t play the credit game and don’t have any debt, but consider those people on a case-by-case basis and only advertise your high standards. If someone really wants to live in your unit despite not having credit or 3x the rent as income, they’ll contact you to discuss their situation.
5. Cover utilities if possible
Including utilities in the rent is a controversial move that many landlords advise against. Tenants who know their landlords cover utilities are more likely to let space heaters, central heaters, and A/C units run all day and night. There’s no incentive to monitor or conserve their usage.
However, covering utilities can give tenants the certainty they need to feel financially stable. Some tenants function better when they know exactly how much their bills will be each month.
Although it’s controversial, there’s a way to make it work. The first thing you need to do is include a clause in the lease that allows you to start billing tenants for abusing utilities. This is easiest when you’re renting single-family homes because you can hold tenants accountable for the electricity they use.
Apartment buildings, condos, and some townhomes don’t have separate meters for each unit so it’s hard to set parameters for what constitutes abuse. For example, if you own an apartment complex with 20 units, you’ll never know if one family is running up your monthly electricity bill by $ 500 while everyone else is using around $ 200.
While it’s a great strategy for creating happy tenants, use your discretion when covering utilities in the rent.
6. Don’t spy on your tenants or use smart devices against them
While smart home devices can be convenient, use them with caution. Tenants want convenience, but not at the cost of sacrificing their privacy. An ADT survey found that 93% of consumers are concerned about how their data is being used.
Recently, several landlords have been in the news for attempting to force tenants to use smart security systems to enter the building and access their mailbox. Tenants felt like facial recognition software was a violation of privacy. Other tenants opposed the idea of smart locks because the electronic key fob was also a tracking device.
Although there is no federal law prohibiting landlords from using smart surveillance and keyless entry systems, the courts have been ruling in favor of concerned tenants.
If you’re going to install smart home devices and security systems, make sure you know where your tenants’ data is going. If the device manufacturer collects that data and sells it to marketers, you should skip that device to protect your tenants’ desire for privacy. Your tenants will appreciate you using only the smart devices and services that don’t sell their data.
7. Let your tenants know you won’t use smart devices against them
There have been landlords who have used smart locks to lock tenants out of their house for not paying rent. Some landlords have even used apps to prevent tenants from using their thermostat to turn on the heat or air conditioning.
Make sure you tell your tenant that you’re providing smart devices for their convenience and that you’re not going to use it against them. Technically, it would be illegal for you to prevent a tenant from accessing their home or thermostat, but since some landlords ignore the law, many tenants are afraid to rent homes that employ these smart devices.
You can earn a whole lot of trust from a tenant by eliminating their fears surrounding smart home devices.
Create good communication with your tenants
The ultimate way to attract and retain reliable and trustworthy tenants is to maintain good communication. When a tenant contacts you with a request, reply as soon as possible, even if only to let them know you’ll get back with them when you have a solution. Good, clear communication is one of the most effective ways to retain your best tenants.
The post How to Attract and Retain Reliable and Trustworthy Tenants appeared first on ReadWrite.
(33)
