Tenant Retention Strategies

As a landlord, your main goal is tenant retention, no doubt. Your aim shouldn’t just be to fill vacancies but to ensure your vacancies are rare. This is because every time a tenant moves out, you lose rent and have to pay for marketing and potentially fees on maintenance and redecorating, depending on the state the tenant left your property in. 

The most effective way to maximise long-term profitability is through various tenant retention strategies. This way, you’ll minimise your turnover, reduce stress and ensure consistent cash flow. 

Why tenant retention matters

Tenant retention is extremely important because of the high cost involved in tenant turnover. The true costs involved in tenant turnover will likely exceed one month’s rent, and here’s why: 

• Lost rent during the vacancy period (the average is 18–25 days).
• Maintenance and make-ready costs (deep cleaning, paint touch-ups, minor repairs).
• Marketing and advertising fees.
• New tenant screening and leasing fees.
• Administrative time spent managing the entire process.

So, it is important to start looking at tenant retention as profitability, because a long-term tenant is a very valuable asset. Having the same tenant at your rental property for a second or third year automatically saves you thousands of pounds in marketing and will, therefore, boost your annual net income. 

Improving the experience of tenants

So, the best strategy for tenant retention is to improve the day-to-day experience of your tenants, and this is mostly driven by maintenance and communication. 

Maintenance 

• Implement a 24-hour response policy: when urgent requests come up that are seen as emergencies, make it the norm to respond within 24 hours. Make sure that this is in your tenancy agreement, too, for your tenants’ peace of mind. 
• Be proactive: it’s always better to be preventative rather than reactive, so schedule regular maintenance checks to avoid costly breakdowns. 
• Invest in small upgrades: if you own a property with high tenant traffic, make sure that you invest in high-quality fixtures – such as commercial-grade floors – as this means you’ll be called out less frequently. 

Proactive and personal communication

• Provide a thorough welcome: Always give your tenants a welcome pack that includes all emergency contact numbers, instructions on how to set up utilities and how to operate appliances or the boiler.   
• Occasional check-ins: Send your tenants email check-ins after the first three months to gauge if everything is fine within the property. This way, minor issues can be addressed before they become bigger complaints. 
• Work collaboratively: Always provide your tenants with notice before inspections, and if an issue arises, always be solution-focused.  

Property enhancements

Look for any opportunities where you can implement cost-effective upgrades that will make living at the property more convenient and increase the value. For example, look at installing a smart lock or doorbell camera or upgrading older light fixtures to modern LED fittings.  

The lease renewal strategy 

This is the last tenant retention strategy available to you and is your final chance to solidify that tenant-landlord relationship. 

The renewal window

Timing is important when it comes to discussing leasing renewals. It is advised to initiate the conversation around renewals between 90 and 120 days before the lease ends. This will give you enough time to negotiate or to look for new tenants if your current ones don’t want to renew the lease. This way, you’ll be able to market the property without your vacancy period being too big and losing money in the process.  

When looking to extend the renewal offer, make sure that your tenants are aware of how valuable their loyalty is. You could offer them a loyalty discount. So, if the rental market dictates a 5% increase for new tenants, you could offer your tenants a 3%  increase instead, as this 2% loss will most definitely be cheaper compared to tenant turnover costs. 

You could also consider offering tangible incentives, such as a £100 rent credit on the first month of the new lease or a voucher to a professional carpet cleaning business. 

Offer flexible terms for tenants who are unsure of their long-term plans. You could offer a rolling tenancy agreement or an 18-month option. This can act as a major convenience for your tenants and can also be the catalyst that secures a longer tenancy agreement with them. 

By implementing these tenant retention strategies, you’ll make sure that you’re a proactive landlord, rather than panicking if your tenant is not looking to renew their tenancy agreement with you. This will transform your rental property into a passive and profitable investment. 

Are you looking to review your landlord insurance policy? If so, be sure to get in touch with us at  CIA Landlord Insurance, and we’ll be available to help you every step of the way.

For more information on managing your rental property efficiently, feel free to visit our advice centre. Otherwise, make sure to get in touch with our friendly team of experts at CIA Landlord Insurance on 01788 818 670.