Is your property management team encouraging property owners to keep their renters for longer? Here’s why you need to focus on this area of your rent roll.
With rental property vacancies being reasonably high in Melbourne thanks to the pandemic, renters are spoiled for choice in many neighbourhoods.
When a renter leaves, the cost in time, advertising dollars and lost rental payments adds up quickly. Despite this, many property owners don’t understand the importance of hanging onto people for the long term.
Here are a few strategies your agency can apply to increase renter retention.
Be clear on costs
Do some research to identify exactly what a cancelled rental contract costs, both for your business and for property owners.
Create a couple of examples around a renter leaving and the place not being occupied for a month. What is the cost in terms of your team’s time? How much will it cost the client in terms of lost income?
Now communicate with your property owners so they know the real value of the ‘bird in their hand’. This will help them understand why it will make financial sense to hang onto a decent renter rather than try to find a better one who may not even exist.
Stay engaged with renters
Regular phone calls to touch base with renters are ideal. If your team is too busy, use a one-to-many communication method like a newsletter and remind readers they can get in touch at any time.
If you don’t already, incorporate a renter support app which makes it easy to lodge repair requests and keep track of payments. This saves time for everyone.
Be proactive
Renter comfort is key. If people like where they live, they will stay. It’s up to your property management team to stay on the front foot so renters feel respected and have great quality of life in their rental property. This includes being proactive as well as reactive.
Could an ancient dishwasher be replaced? Perhaps an air conditioner would be appreciated. The installation costs may be a few thousand dollars but they are tax deductible and renters now have more of an incentive to stick around. Again, it’s a matter of breaking down the benefits to the property owner.
Being responsive is also important. Make it easy for property owners to respond to a request for repair and make a payment so renters aren’t left waiting for something to be fixed.
Extend contracts
It’s always possible to negotiate a slightly reduced rent in return for a longer contract, and this arrangement can suit everyone.
What’s more, remind your PMs to renew rental contracts when they expire, instead of having month to month agreements. Doing this provides security for all stakeholders, including your agency, which now has more long-term clients on its rent roll.
Think creatively
Renters are able to claim part of their rent as a tax deduction if they work from home. You may want to give them the option to pay some rent in advance if they move in towards the end of the financial year. Work with an accountant to create a fact sheet about how to claim the cost of rent when you are self-employed and work from home.
Don’t forget to support both your renters and your property owner clients so they understand how they can claim deductions and save. This will increase goodwill as well as freeing up funds for all stakeholders.
Streamline the acquisition process
It all comes back to your lost renter dollar amount. If your property owners understand the importance of having a fast process to onboard new renters, they will work with you to ensure they sign relevant forms quickly and respond when you call.
Aside from steady income, the benefit to your agency of having a high percentage of long term renters on your books is the value added to your rent roll. Anyone looking to buy will be impressed by the number of renters who have been with your agency for five years or more because it's a sign of longevity and stability.