How important is retention? Incredibly, it costs 5 times more to find a new customer than to keep a current one, according to conversion rate company Invesp. That’s a critical point for landlords to remember. What are a few ways you can improve retention for better ROI on your properties?
Many landlords survey potential and outgoing tenants to see what they want most. However, not enough check directly with their current tenants. Twice annually, ask your renters for a “wish list” of property improvements. Put together a master list. Focus on updates that enhance the property and offer strong ROI.
Get tenants used to small rate hikes every year. If you establish expectations properly, tenants are less likely to leave when they see increases. Plus, you are likelier to retain your renters if you offer three different options at renewal time:
While you will be able to gather some helpful information through the lease, you can also benefit from getting to know your tenants more personally. You can score strong reviews and references from them, as well as retain them longer, if you cultivate professional but tighter bonds. That means knowing more about them.
Along with getting to know your renters, keep track of those elements. Maintain records of your renters’ kids’ names, their hobbies, and anything they might have mentioned when you talk.
Screening your potential tenants well will mean you garner better retention. Poor screening will lead to evictions and nonrenewals. You want to rent to people who have a history of living at single locations for three years or more. Choosing these tenants, rather than people who jump from one residence to another, will lower your turnover rate.
You can have a plan to reward tenants who properly care for their units and pay rent each month on time. Examples of ways you can incentivize tenants include holidays cleanings, pet care when they travel, and gift cards for their yearly anniversaries. These types of rewards will strengthen your relationships and make it likelier that you retain renters at renewal time.
Customer retention simply does not get as much focus as customer acquisition in business. In fact, the same Invesp study from above noted that more than twice as many companies focus on the latter than the former – 44% vs. 18%. Since so many landlords do not focus on retention as much as they should, it is a way you can get stronger ROI than your competitors.