Getting a great deal when buying an investment property is only the first half of a job well done. Next, you need someone to help you pay it off and keep it in good shape….a tenant.
The rental market has been favouring landlords for some time now and vacancy rates are super tight. So there are no shortage of tenants out there.
However, you will save a lot of time and money by getting the best quality tenant in place right away and cultivating a long term tenancy to reduce regular turnover. A tenancy of five or six years will allow you to establish reasonable rent increases over time without having to win over an open market.
The alternative is a series of tenants moving out each year and costing you money in lost rent and letting fees while you fill vacancies.
Here are some key strategies to attract and keep tenants for the long term.
Maintaining and upgrading your property
Good tenants want a comfortable property that they can enjoy from day one. To attract a tenant who will treat your property well and take pride in its presentation, you need to lead by example. At rental open houses, make sure your property looks and feels as good as possible. Regularly assess the property for necessary upgrades and think about things like updating fixtures and appliances, or investing in energy-efficient solutions.
When marketing, highlight recent upgrades or renovations and emphasise all the property’s best features and selling points. High quality professional photography and detailed descriptions will help.
Once leased, respond promptly to maintenance requests and conduct regular inspections to identify and address any issues. Being proactive demonstrates your commitment to the tenants’ safety, comfort and quality of life.
You should also ensure you stay compliant with rental laws and be up to date with new regulations, to protect your investment and also to show your attentiveness.
Tenant background screening
Conducting comprehensive background and credit checks, plus employment verification and rental references is essential.
Remember also to look at how long potential tenants have stayed at past properties. If they have a history of lengthy tenancies, they will be more suitable than someone who has repeatedly left properties after six month leases.
Even if an applicant with a history of long term tenancies is offering less rent than someone with many short term leases in their history, it’s worth thinking about the overall cost. A boost of $10 a week may be $2000 over four years, but one or more vacancy periods in that time and the associated costs could erode the extra rent.
Effective property management
For a reasonable weekly fee, a property manager will screen tenants, give advice and feedback on the market, organise professional photos, list the property for rent online and amplify on social media, plus take care of minor repairs and superficial improvements.
Good property managers often have a database of high quality tenants they know are in the market for a good rental. They may have existing relationships with tenants that they have dealt with before.
A tenant may choose to stay long term if they are being treated respectfully by a property manager, who also deals with their maintenance requests or other issues in a timely and helpful manner.
Renewal of lease agreements
A way to be proactive is to seek to have tenants renew their lease, rather than letting it expire. You can sweeten the deal by offering to listen and try to action any requests or concerns of the tenants. They may wish to personalise their living space or even lock in a two year period for extra certainty, for example. Allowing them some flexibility and understanding will make them more determined to do the right thing by you.
Foster a positive experience
Consider organising occasional events or gifts to let them know you value their contribution to your asset. A Christmas gift of a voucher for a nice local restaurant, for example, won’t cost you a lot but may save you money in the long term.
It can also help to actively seek tenants’ feedback and show you value their opinions and are committed to making improvements to their experience.