Evicting a troublesome tenant can easily run you up to $5,000 in legal fees and eviction costs.
It’s a step no landlord wants to take – but there are those times you hit the point of no return and are left with no choice.
What you need are reliable long-term tenants: those diamonds in the rough who provide the most reliable source of income at the lowest risk.
The problem is, they’re not always easy to find, and the real trick is in keeping them under your own roof. So if you’ve gotten used to an endless stream of new tenants and revolving doors, relax and take a moment.
It’s time to learn how to keep your tenants for the long haul.
The Many Benefits of Long-term Tenants
As a property owner, you have one bottom line, and that’s to keep your properties occupied. An empty property costs you money. Whether it’s mortgage fees, insurance premiums, council tax, utility bills, or maintenance fees, you have a lot of running costs.
The longer your rental contracts, the longer your property income is secure. And that’s not all – your properties can rack up additional expenses between one tenancy ending and another beginning, such as:
- Repairing wear and tear
- A new lick of paint
- Redecorating and renovating
- Changing locks and security
- Professional cleaning services
- Deposit protection fees
Securing long-term tenants for your properties means cutting your average expenses down.
But it’s about more than turning a profit and staying in the black. Long-term tenants provide a multitude of benefits that aren’t apparent at first glance.
They’re Low Risk
No tenant is completely risk-free, but long-term tenants come with the lowest risk. They pay on time and they’re unlikely to default on their rental payments.
And because they inhabit your property for an extended period of time, they come to view it as their own. That means they put your property first. Long-term tenants are far more likely to care for your property and maintain it than short-term residents.
They’ll bring maintenance issues to your attention faster, reducing the likelihood of potentially expensive repair jobs. If you’re lucky, your tenants might even improve your property or handle maintenance (such as repainting the walls) under their own steam.
They Lower Costs
Procuring renters who stick around for years lowers your overheads in two ways:
- You don’t have to worry about empty properties costing you money
- You don’t have the added expense of securing new tenants
It takes time and effort to show prospective tenants around properties, and there are hidden costs between the time you shake hands and agree to rent and first hand them the keys to their new home.
Every month you keep your existing tenants around is a month you don’t have those added annoyances.
You Establish Mutually Beneficial Relationships
As time goes on, you and your long-term tenants form a solid relationship.
The trust you build gives you peace of mind. Happy tenants make for stress-free landlords because they’re less likely to cause problems, cover up damages, and “forget” when the rent is due. And there’s a positive feedback loop:
A stronger relationship between both parties increases the chances your tenants will stick around for longer, which in turn lets you sleep soundly knowing your property is leased to good people who treat it as their own.
Property Management Firms Like Long-term Tenants
Property management firms are well-versed in dealing with difficult tenants and it’s a part of their day job.
But, just as you have a relationship with your tenants, so do property management firms and homeowners associations have a relationship with you.
The better your reputation for finding and keeping long-term tenants, the easier the property management firm’s job – and because they’re the ones handling many of the day-to-day tasks involving your properties, your occupied properties reflect well on them.
You Secure Predictable Income
Undeniably, the biggest benefit of long-term tenants is that your rental income is written in stone. You know them, you know they’ll pay on time, and – should there be any hiccups along the way – you know they’ll give ample notice should problems arise.
The bottom line is that long-term tenants are good for your portfolio and they’re great for your own well-being.
How To Attract Long-term Tenants
Finding and keeping long-term tenants can be a gamble, but there’s a lot you can do to stack the odds in your favor. Making tenants feel welcome is your first priority – there are two sides to the coin, and they’re quite simple:
- Be an attractive landlord
- Have an attractive property
Deep-Clean Your Property
Hiring professional cleaning services to deep clean your property can rack up a sizeable bill, but it’s worth it for the rewards you reap further down the line.
First impressions matter and a fresh, pleasant, and agreeable property speak volumes to prospective renters.
Nothing lasts forever.
Eventually, you’ll need to invest in your properties to keep them profitable and maintain your asking price. Whether it’s new appliances, new furniture, or new paint jobs, renovation breathes life into aging properties and helps to make them stand out from the crowd.
Offer Financial Incentives
The tried-and-true method of securing longer leases is to offer tangible financial incentives.
For example, you could consider offering a lower rent in exchange for a longer lease. The equation you have to think about is how much your property costs per month while it’s empty versus the lower rental income.
This can be a sensitive topic for some landlords – and you’re right to have doubts about lowering your asking price – but the benefits outweigh the costs more often than you might think.
Hire a Property Manager
HOA management firms handle a lot of tasks you might not have thought of, but the two things they do best are managing properties and finding tenants.
Property managers know how to evaluate potential renters and perform background checks. They know how to seal the deal when that perfect match is on the fence and at risk of renting elsewhere.
And they save landlords hundreds of dollars every year. That’s money in your pocket.
How to Keep Long-term Tenants
Finding long-term tenants is only half the battle. Once you’ve secured a long lease, you need a strategy for keeping your tenants around. The longer they call your property home, the better.
Think Twice Before Increasing Rent
Rental increases and price adjustments are the norm. In-demand areas are known for increasing their rents regularly, often year-on-year. Naturally, it’s your right as a landlord to increase your tenants’ rent.
But you should think carefully before you do so.
Even if you have a respectful and friendly relationship with your tenants, you never know what’s going on with them financially – increasing rents even by a small amount might be enough to push them to look for a cheaper home elsewhere.
You might even leave them without a choice.
In general, any increase in rental costs has the potential to backfire and leave you with an empty property.
Listen to Your Tenants’ Needs
Every household is different. To maintain ongoing mutual trust between you and your tenants, it’s important that you take their wants and needs seriously.
That might mean reevaluating your strict no-pets policy or allowing your tenants to make changes to the property in anticipation of a baby. In some cases, it might mean agreeing to defer a rental payment by a month in the event of a sudden layoff.
This doesn’t mean you should roll over and let your tenants do as they please: it’s about respect and reason on both sides. The more your tenants feel listened to, the longer they will remain your tenants.
Stay On Top of Maintenance
Tenants who pay on time and keep your property in order are fulfilling their end of the bargain. It’s up to you to react appropriately should they report maintenance needs.
Sometimes, this can mean paying more than you feel comfortable with for repairs and services, but your main goal is to keep the wheel turning for as long as possible.
Keep Your Long-term Tenants Around for Longer
The verdict is in: Long-term tenants are your endgame. They offer the greatest profit margins and come with the lowest risk, and filling out your properties with long-term tenants gives you peace of mind for good.
They’re your new best friends.
Are you a homeowner keen on maximizing the returns on your investments? We can help. Click here to arrange a consultation on property management.