How great would it be if you knew what your tenants or future tenants are thinking about rental properties?
It has been my experience that landlords tend to put all their energy into what they as landlords want without getting in tune with what the tenant wants.
The nice thing about owning my own investment properties, as well as working with hundreds of investors, is we collectively acquire the economies of scale knowledge.
Through this experience we have discovered the key to getting and keeping happy tenants is knowing what they think and the key factors in their decision-making process. Their thought patterns can change with the economy and their own personal financial situation, so you need to constantly keep on top of this.
Through a lot of interviews and surveys here is what we have found:
Top 3 reasons a tenant may move
- Current lease expiring: As I mentioned above, most landlords do not try to understand what their tenants want and as a result they are not motivated to renew their lease. So a top reason given as to why they move was, “My lease was expiring.” Sad but true. Do not let this happen to you. I learned early on in the business world that success is all about building relationships. I knew I had to build a strong relationship with my tenants, and those long-term lasting relationships would translate into long-term loyal clients for my real estate investing.
- Job relocation or new job: Relocation for jobs tends to be more common place for the professional white collar workers. I have in the past addressed getting two- and three-year leases at the time of lease. Their response to this may give you clues as to whether they foresee job relocation in the future. People who wish to take on a two or three year lease typically feel pretty secure in their long term stability at the current location.
- Moving out of parents home: This, now more than ever, is common place. It is suggested that about a third of young adults age 18 to 30 have been living with their parents as a way to save money. Often referred to as the basement kids because they live in their parent’s basement. These may be great tenants but finding payment history will be more challenging. As an apartment or single family rental home may be a new expense for them, you want to be sure they can afford to make your rent payments.
5 keys that sway tenant decisions about your rentals
- Price of unit: One of their primary concerns is price. When probing deeper, we realized that this is better illustrated as value. It may be human nature to look at the price but it ultimately comes down to value. When they compare what your rental offers versus another rental they want the best value. You want to be sure to promote the benefits and attributes that your rental will offer them so they realize the value of your property.
- Location of the unit: Convenient location is of utmost importance. Knowing real estate is all about location, you want to sell the location of your unit. What is the reason you manage the property or why did you buy the property where you did? Share this within your ads. For example: near bus stops, near many businesses and places of work, near shopping or close to main roads and highway.
- Crime statistics: People of course want to feel safe. Assuming you purchased the property because it was in a desirable and safe neighborhood, share this with your tenants. It is what they want and telling them up front will keep them from having to guess or figure it out.
- School systems: First, remember that housing laws prohibit discrimination against children and “familiar status” is a protected class. You do not want to get into the conversation about having children. However mentioning the quality schools in the area is important to them.
- Community amenities: Tenants too want a home not just a place to live. Share with them what is in the community or the nearby area. The walkability score can be a big benefit to them.
These are things that your tenants are thinking about. When you can address these triggers up front, you will stay ahead of your competition and keep your phone ringing.
Any good business does research and a lot of surveys to find out what their customers want. As renting property is your business, you want to stay on top of what a tenant thinks, so you can stay ahead of your competition. It is the little things that are remembered.
A few little differences can mean a lot to a tenant
These little differences in how we manage our properties have people wanting to stay and rent with us. As families outgrew their homes they would ask us if we had any other properties that were bigger, as they wanted to maintain our relationships. Their friends were always inquiring about renting from us. We have great reputations as property owners who care about their tenants. As a result, the only time people moved is if they left the area or if they bought a house.
You all heard of, or personally live the “Pride of ownership.” When you can create this same type of pride for your tenants, you have created a great partnership that will have them renewing their lease. A person’s home is his castle. It is his independence. Even though they do not actually own the home, you want them calling it their home. When they feel great about where they live and are happy with it, they will call it their home and they will treat it like their home.
When you show you genuinely are interested in a happy partnership where you provide a nice home and maintain the home in turn for happy tenants who pay on time, you have a successful business that is scalable and your investment portfolio can flourish.