Rental property owners are always looking for ways to maximize their return on investment. An obvious way to do so is to reduce their costs, just as it is for all other types of business.
Of course, those experienced in real estate investing know that they can’t cut corners to reduce costs, as that would likely result in properties remaining vacant for long periods of time.
One of the keys to maximizing returns is limiting tenant turnover. The average cost to rent a rental property for a new tenant could range from as little as $1,000 to as much as $5,000. The cost of tenant turnover includes cleaning, repairing damage, marketing the unit for rent and absorbing any costs while not being able to off-set it with rental income.
To better understand what is behind a tenant’s decision to renew their lease, Austin property management firm 1836 Property Management surveyed our community of residents, asking them, “What is the biggest factor that will determine whether you’ll renew your lease or depart?
Below are the top four factors, according to the residents surveyed.
1. Rental Rate (63.6%)
Not surprisingly, rental rate tops the list of lease renewal factors. While tenants won’t make their lease renewal decisions based solely on rental rate, price can be a quick eliminating factor if it’s too high.
An experienced Austin property management team will be able to advise those interested in real estate investing as to what a fair market rental rate would be for your rental property. They’ll help set your rental rate appropriately, and will understand what the market can support in terms of potential rent increases, and how to handle them.
The key with rental rate is to be in a fair range for your property based on its location, its condition, its size and features. Doing so will ensure that resident satisfaction remains high.
2. Customer Service by Property Management Team (13%)
Customer service is an often-overlooked aspect of property management, but it shouldn’t be. Most tenants who live in a rental property expect to be able to contact a landlord or their property management team if they have an issue.
They expect their questions or concerns to be addressed quickly and up to their standards. You won’t always be able to please your tenants in real estate investing, but you can do your best to meet their expectations as quickly as possible.
Quality customer service goes a long way. It can often help rental property owners appease their tenants if something goes wrong that disrupts their living arrangements.
Customer service doesn’t just mean responding to tenants when they reach out about a problem. If you want to keep resident satisfaction high, you should be proactive in your approach and establish a friendly yet professional working relationship with your tenants.
3. How Well the Property is Maintained (11.7%)
Just because tenants are renting their home doesn’t mean they don’t take pride in where they live. Tenants want to come home to their rental property and be welcomed by clean and manicured lawns, by clean exteriors and maintained common spaces — if you have them.
It’s incumbent on landlords to provide a well-maintained property to all of their tenants if they want to ensure resident satisfaction.
This is one area where an experienced Austin property management company can play an important role. They partner with professionally licensed maintenance service providers and companies to ensure the property is well-maintained and is always looking as good as it can.
4. Personal Factors (5.2%)
Among the personal factors mentioned by the 1836 Property Management community of residents were employment and family matters. These factors are obviously out of the control of those in the real estate investing business, but it doesn’t mean there’s nothing you can do about it.
While you certainly won’t be able to solve a family – or job- related challenge, you can sympathize and empathize with your residents, and work with them — within reason. When tenants are experiencing hardships or challenging times, they may just need a little help to get back on their feet.
An experienced Austin property management team will be able to suggest to rental property owners how they can handle situations like these. If you handle them well, it will go a long way in increasing resident satisfaction and improving your chances of retaining your tenants come lease renewal time.
Work with an Experienced Austin Property Management Partner
Lease renewal is one of the most important aspects of real estate investing, and whether it will be successful over the long term. The four factors above are some of the most important variables to residents as they consider whether to renew their lease as it comes to an end.
By working with an experienced Austin property management team like 1836 Property Management, real estate investors can put themselves in the best position to increase and maintain resident satisfaction, which lowers the likelihood of resident turnover.
To learn more about how we can help you in your real estate investing endeavors, contact us today.
By: Kayla Gonzales, 1836PM Marketing Manager