Tenancies part 2: holding onto a great tenant

Tenancies part 2: holding onto a great tenant

In my first article of this two-part series, I discussed how to go about attracting the best kind of tenant for your investment property.  Now let’s consider how to keep them.

Many property investors buy into the property with a long-term view.  A tenancy without interruption means a tenancy without vacancy periods.  This, in turn, provides consistent and continual cash flow.  Generally, in Australia, we have not yet developed a ‘long term tenancy’ mentality where tenants can sign a lease for 3, 4 or 5 years.  As a result, renters have no option but to accept a state of uncertainty regarding how long their home will remain their home.  Through no fault of their own, “house proud” renters who might otherwise happily put extra effort into maintaining (and even improving) a landlord’s property have less of a reason to be “house proud” than a homeowner.  I have spoken with many landlords who tell me they are reluctant to sign a long lease with a tenant because they want to “see how things go”.  The reality is that if landlords do things properly from the outset regarding:

  • advertising the property well;
  • attracting a good tenant;
  • screening the tenant properly;
  • communicating well; and
  • maintaining the property to a high standard

They and their tenants will both enjoy a long and mutually satisfying tenancy. 

The key to keeping a quality tenant is staying on top of maintenance issues and presenting the property in the best way possible.  Once again, communication is vital.  Keep an open mind and be prepared to negotiate with a high-quality tenant, as they will most likely be willing to accept rental increases if the property continues to keep them satisfied.  For example, where a property doesn't have an air conditioner, but the tenant would like one and is prepared to pay more if there was one, a landlord could consider installing an air conditioner and recouping the outlay as a slightly higher rent over the next year or two. Similarly, if a tenant might like (and is willing to pay for) a garden and/or lawn upgrade, the landlords should consider this and once again factor it into the rent. 

At the end of the day, it’s all about having an open and honest dialogue and building a positive relationship with your tenant, encouraging them towards feeling secure in knowing that the property can be their home well into the future.  In return for providing stability, fairness, respect, dignity and open communication, landlords can create a better outcome that lasts long into the future.

In summary, you shouldn’t be leaving the success of your tenancy to chance. By following a process from the time your property becomes vacant all the way through to the very end of a tenancy, landlords can create a greater likelihood of continual and strong cashflow, minimal vacancy, a better cared for property and lower costs overall.  Keeping the channels of communication open, avoiding problems and giving a good tenant reasons to be house proud means landlords will have more reasons to smile as well.  

The tenants you want to keep over the long term are the good ones, so when you find them, you should do your best to keep them happy because, in the end, that’s what will make you happy too.

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