By Jennifer Hermon, Administrative Specialist for Home Rental Services
Investors have one goal in common… to make a decent return on investment with their rental properties. So one of the most common questions we hear as a professional property manager is “how?”
How do I make more money on my investment property?
One drastically overlooked area is renter retention. Sure, there’s location and making a house look good for showings. But once we’ve secured a good renter, a typical landlord forgets about it. They often count on the rental profit coming in from then on out. The mistake is that many owners don’t plan on keeping that renter to avoid costly turn over.
Renter retention starts the day the renter moves in and should never stop.
Typically, just after move in, a renter will find a few things that need to be checked or repaired. Maybe the wobbling ceiling fan didn’t bother the last renter, so it wasn’t reported. A toilet may have a slow leak that no one noticed before because that bathroom was rarely used. Whatever the case, we listen to the renters and do what is reasonable to make the home enjoyable for them. This also protects your investment.
Throughout the year, we keep renters informed with email and blog post reminders about removing hoses in the winter, reporting problems directly after large storms, etc. These are just a few of the things Home Rental Services does to promote renter retention.
So what can you, as an owner do? Listen to your renters. Be Proactive.
Ask your renter what could be done to the home to make them want to sign a new lease at renewal. Recently, we had a renter comment that they really love the home, but the old dishwasher makes a terrible racket. So they can’t really run it when someone is on the first floor. Sure, it works, but if spending a few hundred dollars on a new, quieter dishwasher makes them love the living space, replace it! That is so much less expensive and worrisome than vacancy or making constant repairs to a failing appliance. (Investor Insight: It is almost always a better ROI to replace a dishwasher vs. paying for repairs.)
Reinvest in your rental investment property.
This involves more than just planning ahead for exterior painting or new carpet in seven years. Plan for appliance replacement. Updating light fixtures and faucets can also go a long way. A freshly stained deck not only protects your investment, it reminds the renter of additional living space, giving more value to the home. If someone is proud of their home, whether they rent it or own it, they’re more likely to take better care of it.
In summary, don’t lose money to turnover and vacancy… Spend money on your occupied property to keep your tenants (people paying the mortgage) happy. Give them more reasons to love the home and stay year after year!