As a property investor, you’ll naturally prioritize profitability. You need to be able to make more money than you spend, or else the endeavor will not be worth it. But there are many secondary considerations to keep in mind when optimizing for profitability, some of which aren’t intuitively aligned with profitability.
For example, it’s incredibly important for landlords to be able to keep their tenants happy and satisfied. Why is this the case and what are the best strategies to do it?
How to Keep Your Tenants Happy
These are some of the best ways to keep your tenants happy on a regular basis:
- Schedule and work mindfully. If and when you need to schedule maintenance or renovations at the property, proactively schedule and consider tenant convenience. For example, sometimes, you’ll need to make repairs while a tenant is occupying the unit. You may not be required to give much advanced notice of this, but the more advanced notice you can give, the better. If the tenant has conflicts that prevent them from being available, try to work around them.
- Preserve fair and favorable terms. Generally, you’ll have an easier time managing good relationships with your tenants if you preserve fair and favorable terms. That doesn’t mean you have to offer below market rent, nor does it mean you have to budge on issues of critical importance. However, you’ll build much more trust if you work with tenants in a way that is reasonable to them.
- Proactively communicate. The vast majority of issues can be prevented or mitigated through proactive communication. If you have expectations about the property, voice them early. If there’s a budding problem with a tenant, work with them on it. If you know something important is coming up, explain it to your tenant. The more proactively and consistently you communicate, the better.
- Actively and empathetically listen. Active, empathetic listening is crucial for maintaining good relationships with tenants. If they have questions, answer them. If they have concerns, thoroughly listen to them and try to address them. Sometimes, you can make issues go away simply by being patient and understanding.
- Be flexible. As much as possible, try to be flexible with your tenants. If they come to you with a difficult financial situation and inform you they won’t be able to make rent on time, consider giving them some leniency. If they violate one of your rules, and the behavior is not egregious, simply give them a warning, rather than formally penalizing them. Obviously, you’ll need to draw the line somewhere, but you should be as flexible as possible as much as possible.
- Work to resolve conflicts. Conflicts probably will arise eventually, so have a plan to work them out. Try to be as calm, patient, and collected as you can while you engage with your tenants directly and try to resolve these issues. Almost any conceivable issue can be resolved by two parties willing to work together.
- Show appreciation and gratitude. Periodically, show appreciation and gratitude for your tenants. Even simple gestures, like thanking your tenants for always making rent payments on time or giving them a box of cookies around the holidays, can make a huge impact.
- Raise rent strategically. Raising rent is a part of doing business. Sometimes, you’ll simply have to do it. But there are good and bad ways to raise rent, so be conscientious whenever it’s time to raise these prices.
Why Tenant Satisfaction Matters
These are some of the reasons why tenant satisfaction matters so much for property management:
- Retention over acquisition. Retaining tenants is usually preferable to acquiring new ones. There are many costs associated with acquiring new tenants, and the costs associated with vacancies can be exorbitant. If you can inexpensively keep the tenants you currently have, you can save a lot of money in the long run.
- Dispute resolution. Having good relationships with your tenants also facilitates faster and smoother dispute resolution. If either one of you has a problem with the arrangement, you’ll be much more likely to meet on mutually amenable terms.
- Reputation and word of mouth. Finally, maintaining good relationships with your tenants helps to improve your reputation as a landlord and potentially spread word about your other rental units through word of mouth. It’s an easy way to attract new tenants elsewhere.
With happier, more satisfied tenants, your property management strategy will be much more likely to succeed. Also, keep in mind these tactics aren’t the only ones available to you, and through experimentation, you can find the right balance of tactics for your properties and needs.
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