Property Management Minute - Tenant Retention - Part 2 of 2
Tenant Retention Tips: Part 2
1. Communication is Key
Make sure you communicate with your tenants on a regular and consistent basis throughout their tenancy. Let them know if there is a scheduled maintenance such as parking lot cleaning. Tenants don’t mind being inconvenienced once in awhile as long as they are aware and can make the necessary arrangements.
2. Ask What Would Make the Building Better
Another great way to increase your relationship is to speak to your tenant and inquire as to what would make their environment better to work in. Tenants might have ideas, but don’t openly present them. Many times, it may be something really small that could make the world of difference. If it is a bigger item, it may be possible to amortize the cost in the general operating expenses if all the tenants will benefit from the suggestions.
3. Send Your Tenants Anniversary and Holiday Cards
This is a simple thing that can go a long way. Write your tenants a hand-written note inside. Another idea is to give your tenant a small gift, like a DVD player, when they first move in. It is small, but they will realize you are not an ordinary landlord.
4. Improve Property Energy Efficiency
In today’s market, efficiency and sustainability are very current issues that more and more tenants are acutely aware of. If your property is inefficient, cold or drafty, a tenant won’t want to extend their tenancy. That inefficiency can translate in higher operating costs. There are many federal programs and tax advantages to retrofits of properties that result in efficiencies and reduced operating costs. These will go a long way to helping retain tenants.
5. Improve Property Grounds
Maintaining the front door to your property and the common areas where people walk thru on a constant basis is an often overlooked and important tool to help retain tenants. Plant flowers in the front of your property. Keep the parking lot clean, the grass mowed and the bushes trimmed. Make the property inviting to come into work.
6. Offer a Re-Signing Bonus for a Lease Extension
The simplest and easiest way to incentivize your tenants to stay is to offer them a discount for signing a new long-term lease. Consider how much money and time it would cost you to find new tenants. Look to incentivize your tenants for signing up early, possibly with free rent, a larger tenant improvement allowance, reduction of security deposits, an offer to refresh paint or carpet during their lease term, etc. (Note: be proactive with such a program and start two years in advance of the expiration of their lease, to encourage them not to look at other options).
7. Rent Reductions
If a tenant gives notice because they can’t afford to continue renting the property, consider revising and extending their term to help get the rent down or draw a new lease up for a longer period of time. Repositioning the lease is better than having them move, potentially losing rent revenue or the required new and likely larger capital dollars to make the space ready for a new tenant.
8. Why Are They Looking to Leave?
Always cross-examine the tenant on why they want to leave when they give notice. It’s vital to find out their objections to try and overcome them. Sometimes it’s an issue you can’t do anything about, such as lack of space, but other times it’s something simple that’s easily resolved and encourages them to stay.