As a property manager or owner, it is your responsibility to aim for a high resident retention rate. While it does require a lot of effort and some funds, having a higher retention rate pays for itself. If you are finding it difficult to see it that way, here are some benefits to keeping the residents you have versus working on finding new ones.
When you have residents that stick around, you have a stable income. Consider it this way: when a resident leaves, you have a vacant unit. Open slots waste potential income as they remain vacant, but also cost money to fill. Think of how much it costs to advertise a vacant unit, the time you will take to show the unit to potential renters, the cost and time associating with doing a background check and approving a new resident, etc. When you have residents that stay in place, these costs can be avoided.
Long-term residents know how you operate as a property owner or manager and they like there they are living — if they didn’t, they wouldn’t be a long-term resident. Long-term residents could increase the number of referral residents you receive. You can even offer incentives for referrals, such as a new microwave or discount on rent for referring new tenants.
Better Income for Bad Times
Net operating income is important for a rental property. As a property owner, you need a solid NOI and when you have a high resident retention rate, you will.
Less Turnover Costs
You already know that it is cost-efficient to have a higher resident retention rate, but your turnover costs are also reduced when you have a high rate. You can avoid turnover expenses like changing the locks, replacing carpet or having carpet professionally cleaned, replacing blinds, repainting, changing appliances, etc. All of these costly repairs and replacements aren’t needed when the same tenant remains in a unit, which means you could potentially save thousands of dollars per year on turnover costs.
Reduced Rental Income Losses
You don’t take in rent when you have vacant units. Not only are you spending money advertising for new tenants, but you are missing out on income you could have had if the tenant stayed in that same unit. In some cases you could see a potential rental income loss for months, especially when you hit those months where residents just aren’t looking for a new place. If you have multiple units that sit vacant at the same time, you’ll encounter an even larger rental income loss.
Focusing on the tenants you have right now is the best investment you can make as a property owner. The more time you take keeping your residents happy, the less time you will spend finding new ones, taking care of turnover and suffering extensive losses.