20 Oct Finding Good Tenants in Tough Times
Big Dogs, Smokers and Giftcards.
What do these three things have to do with property management? I guess a better question is what do these three things have to do with property management in tough times?
In our economic climate, we have to start making lemonade out of the lemons we’ve been handed. In other words, we need to pivot a bit and make the most out of the crappy situation we are finding ourselves in as rental property owners. Time to get creative. I assume that we can agree that times aren’t the greatest for our industry, supply is up, vacancy is up and rental fees are down. The normal tactics of keeping tenants or getting new ones aren’t working like they used to and we are finding ourselves paying mortgages all on our own. I know it sucks, big time.
It’s time to re-evaluate everything, even the rules we told ourselves that we would never break. To start, one of my biggest rules was no smokers and no big dogs. Well, now that I have vacant properties costing me full mortgage payments each month, I thought to myself why not open up to these tenants who are normally turned away? Also knowing full well that once the market rebounds, their monthly rental fees will be the first to go up. It is far less money to have my mortgages partially paid for than to feel the full effect of paying full mortgages payment month after month.
Besides bending the rules getting new tenants in your units, what about retention of your existing renters? Fun fact, do you know how much the average cost is for tenant change over? $4,000 (from cleaning to fixing to advertising to interviewing, etc.). It’s a killer to change out the old to the new and that’s not taking into account the months that your unit may be sitting on the market.
It starts at hello. What do I mean? I mean the relationship starts right at the beginning when they are moving in. Let me ask you a question, how hard would it be to fire your friend? Pretty tough I would think. So why not build that type of relationship out of the gate with your tenants? Send them a gift basket when they move in, give out a movie/dinner night package, cut back on their damage deposit so they can have some extra move-in money, get creative, the sky’s the limits. The point is that you are starting a good long-term relationship out on the right foot. Building trust, making friends, getting the tenants jacked that you are a great landlord and always having their best interests at heart is the name of the game. I know I would love to have a landlord like that. Be that landlord and you will be rewarded by tenants that will never leave…good time or bad times.
If you don’t change, your competition will and you will be stuck paying mortgages month after month.