What keeps the heart of a long-term rental real estate investment beating? Tenants, of course! A high occupancy rate and good tenant retention make for a healthy real estate investment.
Why Focus on Rental Occupancy Rates?
Well… Without tenants, real estate investors would make no rental income from their rental properties and lose out on any kind of return on investment from real estate investing. Essentially, real estate investors won’t enjoy a positive cash flow with a high vacancy rate!
Maintaining high rental occupancy rates can make rental property management and real estate landlord responsibilities much easier and much less expensive for real estate investors and landlords. Tenant turnover can be very expensive for real estate investors owning rental property. With tenant turnover come the costs of marketing and advertising the vacant investment property as well paying out of pocket for costs that rental income should cover. Not to mention all of the extra landlord responsibilities during tenant turnover that can make rental property management a hassle.
If it happens too often or lasts too long, tenant turnover can have a seriously negative impact on the return on investment and the positive cash flow for rental properties. Unfortunately, real estate investors and landlords can’t always control tenant turnover and rental occupancy rates through good rental property management or keeping up with landlord responsibilities.
Still, there are ways to increase occupancy rate for traditional, long-term rentals. If you’re a real estate landlord of traditional, long-term rentals, you have to know how to attract and keep tenants to increase occupancy rate. We’ve gathered for you the best rental property management tips to boost your occupancy rate for a better tenant retention rate.
Click here to find a traditional, long-term rental for real estate investing business now!
How to Increase Occupancy Rate for Traditional, Long-Term Rentals
Choose a Location Attractive to Tenants
One of the best real estate investing tips to avoid a high vacancy rate has to do with initially choosing the location for your long-term rentals. If a real estate investor ends up buying an investment property where the location is undesirable to tenants, it can be hard to increase rental occupancy rates, no matter how great the rental property management is. A few factors that make an investment property appealing to tenants include:
- Job growth
- Walkability and access to public transportation
- Commercial centers (shopping malls, restaurants, pubs, etc.)
- Good school district
- Low crime rates
Find residential properties in a location with these attributes, and you should enjoy a low vacancy rate and low tenant turnover. A combination of good rental property management and a good location can’t be beaten when it comes to real estate investing!
Looking for a location for real estate investing with these attributes? Click here to find residential properties in the best locations.
Don’t Skip Out on Tenant Screening
Tenant retention starts with good tenants. How can real estate landlords maintain a good landlord tenant relationship if they don’t find good tenants first? Good tenants encourage great rental property management and make taking care of landlord responsibilities easier. Real estate investors who become a landlord would rather deal with a vacancy rate for residential properties than headache-inducing tenants more often than not.
In order to keep a good tenant retention rate, put in the effort to screen tenants. The best rental property management tips to do so are:
- Look at credit reports for tenants
- Check eviction histories from other residential properties
- Perform a criminal background check
- Talk to employers of tenants
- Talk to current and past landlords about their landlord tenant relationship
While these steps will help a real estate landlord weed out bad tenants for rental properties, don’t forget to take a look at housing history. This is one of the best rental property management tips for high rental occupancy rates (and it’s often overlooked by real estate investors and landlords). If you’re looking for long-term tenants, someone who has moved around a lot and jumped from one rental property to another won’t be who you’re looking for to increase occupancy rate. These tenants won’t aid much in the overall return on investment or positive cash flow.
Take Care of the Landlord Tenant Relationship
Make it part of your landlord responsibilities to take care of the landlord tenant relationship. A good landlord tenant relationship is key to a high occupancy rate and high tenant retention rate for traditional, long-term rentals. There are simple things that a landlord can do to maintain a good landlord tenant relationship through rental property management and landlord responsibilities:
- A real estate landlord can do his/her best to respond to tenants in a timely manner. Even if you can’t actually cater to the request of tenants, hearing them out can help build a strong landlord tenant relationship.
- Keep tenants in the know about the happenings of the investment property to prevent tenant turnover: any major changes, renovations, changes in rent prices, and even changes in the neighborhood.
- Real estate landlords should always respect the privacy of tenants. Privacy can make or break a landlord tenant relationship.
Maintain the Investment Property
Keeping rental properties in a good, safe condition will help with tenant retention rate and occupancy rate for sure. Landlords who show they care about the living conditions of their tenants are likely to have a lower vacancy rate and tenant turnover. It’s a key part of landlord responsibilities and rental property management that can’t be ignored! Aside from basic upkeep of residential properties, real estate landlords should consider the following:
- Make updates as needed to amenities
- Fresh paint and carpet cleaning annually or every few years
- Upkeep of any common rooms/area of the investment property
It’s a good idea to be flexible in what you allow tenants to improve on the investment property. Long-term tenants need to feel that rental properties are their home, and this will help. Additionally, reasonable improvements will add to the overall value of your investment property. This will help with return on investment if/when you choose to sell the rental property.
Be Aware of the Real Estate Market Around You
Sometimes real estate investors suffer from a high vacancy rate while the neighboring landlords’ rental properties are flourishing. This could be due to two reasons: either the rent price is all wrong, or the investment property itself can’t compete. If real estate investors don’t fix these issues quickly, return on investment and positive cash flow will suffer for sure!
Landlords have to do their research on the real estate market to determine how much to charge for rent price for long-term rentals. An easy way to do this is to use Mashvisor. Mashvisor shows rent prices for a particular area, and real estate investors can compare the rental properties and rent prices to their investment property.
Click here to start comparing rent prices of residential properties and find out how much you should be charging.
As for competing in amenities of residential properties, the best way to do this is to visit vacant rental properties in the area. See exactly what they have and how they compete. Make changes (within the limit of a budget), and you’ll be able to beat the vacancy rate.
Start Carrying Out Exit Interviews
The last of the best rental property management tips for keeping a high occupancy rate for long-term rentals is to carry out exit interviews. An exit interview is an interview with tenants who are leaving your investment property. Inquire about the following:
- Ask them why they left. Was there was anything you could have done as the real estate landlord to have made them stay?
- Was the issue the landlord tenant relationship or the rental property management in general?
- Find out where the tenants are going to see what your rental property is lacking in comparison.
Enjoy a high occupancy rate and tenant retention rate for long-term rentals by immediately taking action with this guide on the best rental property management tips. Don’t let your residential properties suffer from high vacancy rate when you can easily increase occupancy rate for positive cash flow. It all starts with choosing an investment property in a good location for real estate investing. Then, the rest is on the shoulders of rental property management and the landlord responsibilities of owning a rental property.