How to Treat Your Tenants Well and Why it Pays Off in the Long-Term.
If you want to build a long-term income with your rental property, taking care of your tenant now is as important as taking care of your actual property. Importantly, how you treat your tenants now can truly have a lasting impact. By establishing good, open and honest communication upfront paves the way for a successful and long lasting relationship. If you give you 100% when it comes to effectively communicating with your tenants this will help eliminate any confusion down the line plus it will give them comfort knowing you are a professional and a pleasure to work with. Who doesn’t love when communication goes smoothly?
Can being a landlord make you rich?
Being a landlord can be very lucrative, as you’re essentially running your own business. Making wise decisions about what properties to purchase is paramount, and once you have the property of your choosing on which to focus your attention, you should begin thinking about ways to turn the greatest profit from it.
With regards to real estate investment strategies, landlords make money by one of four methods.
One, they turn the house into cash by selling it.
Two, they rent it to a tenant, who pays an agreed upon sum every month.
Three, they borrow against its equity by obtaining a mortgage.
Four, they make money by deducting the interest costs and certain expenses when filing their income tax.
How do you reward good tenants?
Just as you hope for a dream tenant, all tenants hope for a dream landlord. Tenant turnover is not only costly but disruptive to their lives and yours, not to mention hard on the property too. The good tenants pay the rent on time and treat your property well so do everything you can to keep them happy: fix maintenance problems quick, create an atmosphere of community among tenants, reward the rules-abiding ones with extra perks, such as free storage space or being first in line if more space becomes available. Also, if you assure them they can ask any questions when needed this will help open the line for communication. You would much rather have your renters be over communicative rather than noncommunicative especially when it comes to maintenance issues and/or questions.
What is a rental incentive?
Incentives and tenant incentives are often used in regular business practices. This type of incentivizing is done to adjust rent rates to reflect the values that tenants have negotiated with the landlord upon signing their lease agreement, which we call “face rent.”
Rental incentives are a great alternative to increase your retention rate without lowering your monthly rental rate. Some examples of rental incentives are a discounted or free month if your renters re-sign their lease for an extended period of time and better yet if they resign early. This not only saves you money from re-listing but also gives you a longer period of time where your rental rate is locked in AKA guaranteed income in your pocket and/or bank account. Another sample is if you give your renters gifts or gift cards for re-signing with you. Note, it’s best to provide them with a deadline before your actual deadline, we all know how people work when it comes to deadlines.
How do you attract long-term renters?
Renting out your home or apartment to a tenant is great for making extra income, but it’s also important to build a relationship with your tenant. One of the best ways to do that is to be respectful of their home and them! So, when you first meet your tenant and they move in, it’s a good idea to go over house or lease rules and give them a tenant manual as well as any important information. This can include local restaurants, bus/train schedules or if there are any surrounding shops that give discounts for being a resident in your area. This is a wonderful way to reassure them they’ve made the right move as well as helping them feel welcome and comfortable. This will help them feel like they’re a respected member of your house / rental property and it’ll also make you feel that way about them!
By treating your tenants well, you are not only creating a better sense of community but also making your monthly income more stable. Treating your tenants well will almost ensure you have less damage to your properties. Plus, when having long term renters, your turn over rate decreases which means less money out of your pocket (and hassle) when it comes to turning over your rental property and getting it move in ready for the next occupant. These costs can quickly add up, especially when you are doing the move-in flip more frequently.
All in all, establishing a strong and effective communication between you and your renters at the very start will benefit both of you through the duration of their time at your property. It’s best practice to go above and beyond when it comes to making them feel welcome in your rental property and new area. When you offer incentives for your renters to stay, figure out what will be beneficial to both you and them. The goal is to keep your rental income steady for as long as possible while decreasing your flips and keeping your renters happy as well. If done right this is truly a win, win win situation.