15 Tenant Retention Tips
Obtaining new tenants can be a costly affair for landlords. If tenants are dissatisfied, given today’s market, they can easily seek new space. It is always the preferred option to retain good tenants – those who pay their rent on time and cause little or no problems.
The Coldwell Banker Commercial organization offers these tips to assist in retaining tenants:
1. Meet Your Tenant
Even though the property was bought as an investment, you are still in the people business and going out of your way to meet up with lessees can lead to longer, more meaningful dealings between yourself and your tenant. Also, understand their business and business model. They may have unique requirements.
2. Don’t Get Complacent
A long-term tenant is a valuable asset in a saturated rental market, so make sure you keep on top of all those little jobs that will make it easier for the tenant to feel like it is a good working environment.
*Maintain the property in the best possible condition; make sure equipment is up to date
*When the tenant reports maintenance problems, sort them out immediately.
*Issues involving water, electricity and heating and air conditioning or safety should be resolved inside of 4 hours with a follow up to the tenants.
3. Have the Right Attitude
Show that you’re fair-minded and understanding. Don’t act like the tenant is ‘bothering’ you when they call. Be pleasant and show concern for their needs. Don’t ignore their questions or distresses.
4. Replace a Minor Item at Least Once Every Year
Have a plan to maintain the property on an annual and rotating basis so you are constantly generating a fresh appearance. Keeping up with some of the competing buildings will make a tenant see you care about the property and they will be less inclined to look around for unnecessary reasons. Amortized over time, the minor expenses don’t cost that much. Plus, they will be attractive to new tenants, and they increase the value of the space.
5. Tenant Improvements
Requests for improvements should always be considered. Be open-minded and flexible with the tenant’s space. The tenant can always restore the space to its prior condition if agreed.
6. Respect their Space
When landlords meet tenants in their property, be respectful, friendly and informal. Avoid disparaging comments causing them to be unsettled by voicing possible future plans that are adverse to the current tenancy.
7. Pro-Active Problem Search
Perform regularly scheduled “preventative maintenance checks.” Make sure the tenants are aware of when such things are scheduled. Performing these checks demonstrates a proactive approach as opposed to a “wait and see” and allows you to find issues before they escalate to a stage where they hand in their notice. Always ask if everything is acceptable or if the tenant has and problems.
8. Communication is Key
Be sure to communicate with your tenants on a regular, consistent basis throughout their tenancy. Let them know about scheduled maintenance. Tenants generally won’t mind being inconvenienced so long as they are aware ahead of time and can make the necessary arrangements.
9. Ask What Would Make the Building Better
A great way to improve your relationship with tenants is to inquire about what would improve their work environment. Tenants may have ideas but could be shy about openly presenting them. More often than not, it’s something small that makes a world of difference. For bigger ideas, it may be possible to amortize the cost of general operating expenses if all the building tenants benefit.
10. Send Your Tenants Anniversary/Holiday Cards
Send your tenants a card with a hand-written note inside or 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.
11. Improve Property Energy Efficiency
In today’s market, efficiency and sustainability are issues that tenants are acutely aware of. An inefficient property can result in a loss of tenants and even higher operating costs. As an alternative, look into federal programs and tax advantages to retrofits of properties that result in better efficiency and reduced operating costs. This could go a long way in retaining tenants.
12. Improve Property Grounds
It’s all about the little things. Maintain the front door of your property and the common areas where you see the most foot traffic. Plant flowers in the front of the property, keep the grass neat, the bushes trimmed and the parking lot clean. An inviting property can go a long way in keeping tenants happy.
13. Offer a Re-signing Bonus for a Lease Extension
The simplest. Most effective way to retain your tenants is to incentivize them with discounts for resigning a new, long-term lease. Offer free rent, a larger tenant improvement, allowance, reduction of security deposits, an offer to refresh pair or carpet, etc. Think about being proactive with an incentive program by offering the discounts two years before the expiration of their lease.
14. 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.
15. Why Are They Leaving?
When a tenant gives notice to leave, it’s vital to find out why. Perhaps it’s an issue that you can’t solve such as lack of space, but more than likely it’s something that can be easily resolved. It never hurts to ask.
Article Found in Vol 1 Issue 1 of The Lite Side of Commercial Real Estate by Coldwell Banker Commercial