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Buying rental properties is a great long-term investment. The main thing you need to do to get a great return on your rental property investment is to find the right tenants. Once you find great tenants, you need to work on keeping them happy and loyal. High tenant turnover rates can result in a loss of profitability, which is why you have to lower this vital metric.
Approximately 74% of the rental properties in the United States are owned by individuals. If you don’t have corporate backing, then fixing high tenant turnover rate falls directly on your shoulders. The longer you wait to find a solution to this problem, the more money you will ultimately lose. Below are some things you can do to make high tenant turnover rates a thing of the past.
Implement a Thorough Tenant Screening Process
The first step in lower tenant turnover rates is finding the right people to rent your properties to. This process starts with a rental application that collects the right information from potential tenants. Ideally, you want to ask for references, financial history and proof of employment on this application. Rather than collecting this information and failing to use it to your advantage, you need to put it to use.
By calling the owners of the properties a person has rented in the past, you can find out more about their track record. You also need to perform extensive background checks to ensure you aren’t renting your property to a dangerous criminal. If you don’t have the time or the tools to thoroughly screen potential tenants on your own, then hiring a property management company is a wise idea.
Respond To Tenant Problems Quickly
As the owner of a rental property, it is your responsibility to maintain it and repair any issues that may arise. When problems occur in your properties, you will receive a call or email from your tenants. Failing to respond to these messages or calls in a timely manner can create big problems. Ignoring these problems will only lead to them getting worse.
If your tenants feel like their needs aren’t being met, they will probably start looking around for new places to move. Hiring a property management company is a great way to ensure all maintenance and repairs are handled in a timely and efficient manner. By investing in property management services, you can lower the risk of important repairs falling through the cracks.
Avoid Drastic Rent Increases
Drastic rate increases are also another mistake you should avoid if you want to keep your tenants happy and loyal. Most people have to live on a very tight budget and the slightest increase in their monthly rent can send them into a financial tailspin. If you do want to raise the rent, you need to let your tenants know well in advance and take the price up incrementally.
By using the tips in this article, you should have no problem lowering your tenant turnover rates.