One of the best ways for property managers to help rental property owners maximize the ROI on their investment is to keep vacancy rates as low as possible. By keeping renters in place from year to year, you’re proving your value as a property manager.
Millennials are the largest generation since Baby Boomers; and lucky for rental owners and property managers, they prefer prefer renting to buying homes, especially in areas where down payments require considerable savings. This makes them an ideal target demographic—but with so many appealing apartments coming online in major cities, lease renewal rates are lower than ever.
So, how do you keep your Millennial renters from moving away? You’ll need to have a comprehensive strategy to appeal to their preferences through specific, actionable steps. Renters who renew their leases aren’t born—they’re shaped by good property management techniques.
#1: Survey Your Residents
When it’s time to consider making renovations or adding new amenities, there’s no substitute for knowing what your current residents would like to see. Much is made, for example, of Millennials’ fondness for environmentally-friendly spaces. As a result, you might be thinking of upgrading your recycling bins or putting in bike racks as capital improvements.
While this might be true of your renters, it’s also potentially true that they’re dreaming of granite countertops in the kitchen rather than butcher block. If they do, all of the snazzy bike racks in the world aren’t going to appeal to them as much as a nicer kitchen.
Try writing an email, postcard, or flyer that asks what residents would like to see in the way of upgrades the next time improvements are made to your property. Are their appliances out of date? If you replace an energy-sucking appliance with a more modern model, you’re not only reducing utility bills—you could also keep a great tenant.
Be sure to explain that residents can suggest any updates, but you’re gathering ideas, not making promises. Specify that final determinations will be up to you and the property owner, and will be based on an update’s feasibility, popularity, and cost.
#2: Do Competitive Research
Renters won’t renew their lease if they see a better deal or more amenities somewhere else—it’s as simple as that. It’s important to know what other area rentals are offering (and how much they charge) so that you can stay competitive.
Do some research on rents and lease terms in your area. Rent prices are always a trade-off between revenue and occupancy rates–some property managers elect to set their rents on the low side to keep their vacancy rates close to zero. In addition, make sure that your rental terms are reasonable. If the standard deposit is one month’s rent, it may not be wise to charge two or three.
Take a tour of comparable rentals at least once a year. See what the competition is offering. If granite countertops are pretty universal, your properties may look dated or dingy if you don’t keep up.Read it on the #BuildiumBlog: 5 tips for increasing lease renewals among Millennial renters! Click To Tweet
#3: Stay in Touch
Add a personal touch to your communications with renters. You want to accomplish two strategic goals here: To ensure that they feel valued as tenants; and to make your job easier when it comes time to collect rent and enforce the terms of the lease.
- Send them a card thanking them for being good tenants during the holidays, or when they’ve lived in your community for a certain period of time.
- Remember the names of your tenants and their kids or pets, and ask how they’re doing if you see them while you’re working on the property.
- Build bonds in your rental communities through weekly or monthly activities. Don’t be afraid to stop down and say hi—it’s a great way to find out how you can improve!
#4: Offer Incentives for Referrals
If you have good tenants—pleasant, considerate, responsible—you not only want to keep them, but you also want to attract more like them. One good way to do this is to offer them incentives for referrals. Give them a good reason to connect you with a friend, co-worker, or family member of theirs.
Be creative with the incentives. Partner with local merchants for gift cards, for example. You can also offer a free month’s rent, or provide a cash-back plan.
Once you’ve developed an incentive that works for you and your renters, publicize it via social media, email, or flyers. Everyone loves a good deal!
#5: Sweeten Your Lease
Make your Millennial tenants a particular point of focus at lease renewal time. If you’re in a hot real estate market with high demand, you may be justified in raising rents–but you likely fear losing your best tenants. In that case, you may want to offer great tenants a break on rent increases if they sign a lease for two or three years.
You can also soften the blow of a rent increase by giving your residents something they’ve been asking for–like allowing pets in your community, for example. (Millennials might just be the most pet-friendly generation yet!)
Savvy property managers will want to prove their value by maximizing property owners’ ROI. Retaining good tenants and lowering vacancy rates is arguably the best way to achieve this. Millennials are a great target demographic to retain because many of them prefer to rent. Utilize these five strategies and their action plans to keep your tenants happy.Discover 5 actionable steps to retaining Millennial renters year after year, only on the #BuildiumBlog! Click To Tweet
Liked this post on how to retain Millennial renters? Here’s even more great advice on this topic: How to Attract Millennials to Your Rental Property–and Keep Them in the Long RunRead more on Resident Management