Traditionally, tenants start to think about renewing their agreement around three months before it is due to expire. This always used to provide the tenant with plenty of time to find alternative accommodation if their landlord wanted to increase their rent. However, the due to the current market, which has a surplus of rental properties, some tenants are now planning their exit up to 12 months in advance. If you have long-term tenants who appear to be satisfied with their living arrangements, do not get complacent – they may be on the lookout for their next great home.
Most tenants move to get better value, and this is especially true when they have been living in the same place for around three to five years. Many will closely follow the rate of rental inflation, and keep an eye on prices. In the least competitive areas, for every tenant looking for a new apartment or house, there are 10 to 15 suitable properties on the market. The combination of increasingly savvy tenants and a more competitive market makes it challenging for landlord agents to keep their best customers. Here are some tips to help you ensure that your tenants renew their contract with you.
Never Neglect Your Tenants
Throughout the tenancy, be sure to reply to every concern. Most tenants leave a property because simple maintenance issues are not resolved by their landlord or agent. If they always wait four weeks to get a tap fixed, or a boiler repaired, they will soon start to look for a modern property with new fixtures and fittings. This is why a good property manager is essential for busy landlords – they’ll be able to deal with these day-to-day queries much faster.
Be Ready to Negotiate on Price
If a tenant asks for a lower rent before renewal time, think carefully before rejecting it. The chances are they have either seen something better for the same price, or something similar for less. People only move if they have good reason to, and it’s usually either down to money or the quality of the accommodation. Dropping the rent for 12 months is less costly than risking a void period.
Keep a Close Eye on the Local Market
Monitor all new properties coming to the market and consider how your tenants will view them. Invest in your property every couple of years to match current trends – be sure to update fixtures and fittings, replace flooring and ensure everything is maintained to a high standard. Because tenants rarely have permission to change anything within an apartment, many resort to moving to a new build when their accommodation gets a little tired, rather than approaching the landlord and asking them to update the property.
Trust Professional Guidance and Discuss Feedback
Market conditions can change rapidly, so always trust the advice given by your agency. Sometimes an agent will tell you to drop your rental price to attract new tenants. As mentioned already, in some areas there are more properties on the market than tenants, so competition amongst property investors is high. Agents and landlords should discuss market conditions on a regular basis to ensure there are no surprises.
Constant Property Research
Before making any decisions, carry out extensive research so that you are fully aware of market conditions. Property investors hire agents for their knowledge of market conditions, as well as their marketing expertise. Ultimately, the key to retaining the best tenants is to ensure that the property is always offered at a fair price for its age and condition. If you decide not to update it every few years, be prepared to freeze or even drop your price if you wish to avoid that dreaded void period.
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