Why Good Tenants Leave and How to Keep Them
People come and go; it’s the natural order of life. But when it comes to your rental property, you don’t want people leaving—especially the quality tenants that took so long to find.
Not only do quality renters pay their rent on time, keep the place clean, and avoid causing trouble, but they can also lower your expenses and vacancy rates. In this blog, we’ll explore some of the reasons why good tenants leave and learn some solutions for you to keep them longer.
Why Good Tenants Leave and What You Can Do About It
It can come as a shock when one of your good tenants decides to move out and rent another home (we’ll ignore tenants that buy their own home). You may wonder what you did wrong, or what you could have done to make them stay. Well, the first step to that is by putting yourself in their shoes and understanding the situations that’ll lead them to find a new home.
Here are 4 common situations that lead to tenants leaving and what you can do to keep them around for a longer time.
Problem #1: More Affordable Options in the Market
Housing costs have been rising for the last few years—especially when it comes to monthly rent. Because of this, tenants are often on the lookout for a place where they’ll get a better deal. In 2020 especially, 42% of people cited affordable housing as the main reason for their move.
So, some tenants may choose to relocate to a cheaper part of town or move to a cheaper city altogether.
Solution: Determine the Cost-Benefit of a Rent Increase
Turning over tenants usually costs money. Lost rents while vacant, RentReady repairs, etc., all add up and hurt your profits. While all landlords want to maximize their profits by charging as much rent as possible, sometimes it’s cheaper to keep an existing tenant, than to go through the turnover process.
When it’s time to renew a lease, be sure to do an Annual Evaluation/Inspection to determine what repairs would be needed to re-rent the home at market rent. You may even want to scope out the local competition to see what they’re offering to get top-of-the-market rent.
To do this, figure out how much any repairs/improvements will cost. Then figure out how much the difference is between how much the existing tenant is willing to pay and the market rent. Divide that difference into the repairs/improvements amount to figure out how long it will take you to recoup those funds.
If it’s more than 3-5 years, you may be better off keeping the current tenant, even at a below-market rental rate.
Problem #2: Annoying Neighbors
Nobody wants to live in a stressful place—especially if it’s because of strangers they supposedly have no connection with. Having intrusive or problematic neighbors is a legitimate reason to relocate to somewhere more peaceful and safe. In fact, about 10% of tenants in one survey said they moved because they wanted to be in a safer, more family-oriented environment.
Solution: Communicate
Not only are problematic tenants harmful to your investment, but it also drives good people away. To combat this, communicate with all your tenants and listen to their complaints. Deal with any troublesome tenants you have sooner rather than later so that the problem doesn’t get out of hand.
If the problem is a neighbor that you have no control over, advise your tenant to contact the police when necessary.
Problem #3: A Lack of Repairs
Property maintenance works and repairs are inevitable—even under the care of good tenants. The difference is that they’ll be more concerned and expect you to address the issues right away. Any lack of attentiveness from their property manager or landlord will raise a red flag, making tenants feel like nobody is there to look out for them.
Additionally, it’s a part of your responsibilities as a landlord to maintain the property and keep it in livable conditions per Michigan rental laws.
Solution: Be Attentive to All Problems
Not only is maintaining and repairing the property your obligation as a landlord, but it’s also a way to show care to both your tenants and investment assets. No matter how big or small the issue is, listen and address them promptly.
We also suggest you establish an effective way to communicate with your tenants so that you can return their calls within 24 hours. Doing so will keep your tenants happy and allow you to be proactive in maintaining your properties for the long run.
Problem #4: Need More Space
From young professionals to growing families, everybody needs more space nowadays. The global pandemic that resulted in the rise of remote working also gave importance to an at-home workspace, workout area, and overall breathing room.
Most apartments or basement suites don’t offer enough space for the long-term as people start a family, so tenants tend to upgrade to larger spaces. One survey even found a third of homebuyers would move cities for more space if remote working becomes the norm.
Solution: Offer New Options and Flexibility
Landlords with a bigger portfolio of rentals will have the upper hand here, as the solution is to offer more space for the tenant. Introduce larger units or homes with more bedrooms—anything to ensure that your tenant receives the space they want without looking too far.
Long-Term Tenants for Long-Term Returns
At the end of the day, all your efforts to keep good tenants around will pay off with great rewards. You’ll have less stress dealing with tenant problems, fewer things to fix and maintain in your property, and more stability in your rental income and cash flow.
If this sounds like something you need in your rental business, feel free to contact us!
Our team of expert property managers can provide professional tenant screening services and take care of your tenants throughout their stay—ensuring that you keep the best ones around for a long time.