It’s common for renters to move frequently nowadays. Sometimes, it’s due to a financial situation change. Maybe the tenant can no longer afford your unit or it’s possible that they can afford to spend more on housing. What are the top reasons that tenants leave a unit or rental property? What can you do as an owner to keep good tenants, while maintaining and maximizing your cash flow?
Tenants want a cheaper deal
Over the past five years, rents keep going up. As a landlord, it’s also important to continually and incrementally increase your rental rates every year to keep up with inflation and costs. This could have an effect on what your tenants will want to do. Some individuals will reach the place where it makes sense for them to move somewhere that costs less. Look at your rents and evaluate if you are competitive with the local market. Stay reasonable, but remember you need to make a profit also. If local market rents are renting at 30 percent less than what you are charging, you could face an issue with tenants wanting to find a better deal. Price your properties at an ideal point and look for locations in the future that offer room to grow.
Fear of change or uncertainty in a rental situation
Tenants can simply be afraid to leave their current rental situation. They may be afraid of the possible scenario that the landlord may raise the rent when they need to renew their lease. They could be afraid of you as the landlord if they have ever gotten behind in rental payments. Property managers can also instill fear in tenants at times if clear expectations are not outlined or you bring someone new to your team. Take time to listen to your long term and loyal renters. They will offer good insight into an overall snapshot of your property. Connecting with your tenants and discussing lease renewals and maintaining your property will show that you care about their best interest and are there for more than just cashing a check.
Need for space
Space can become an issue for renters. Many jumped on a minimalist style of living around 2008, but now, you see a trend for expansion. A Realtor.com survey showed that more millennials and baby boomers are focusing on single family homes in the suburbs over urban, city developments. Space is important and it’s one of the top reasons why tenants move on.
Purchasing a home
In many areas, rents are higher than a mortgage costs. With low interests rates and credit scores going up, it’s making buying a home an attractive prospect. As a landlord, you probably won’t be able to stop this trend, so make the most of it. Offer great exit service for your renters. Return deposits in a timely manner and ask for a review immediately. If you can, get them to buy their home from you.
Abusive, loud, annoying, intimidating neighbors are NOT a positive addition. These types of people exist and something you should screen when searching out rental properties. You don’t want to take on an investment that includes individuals who simply are going to start drama or make your life and their neighbor’s lives difficult. Keep the avenue of communication open between your tenants. If you have a problem unit, be aware that this might affect the status of your other units.
There are a variety of reasons why tenants leave— even if they like the units they are occupying. Smart landlords will get ahead of situations and discover ways to keep their current tenants happy. If you can avoid turnover costs, that will help your business greatly!