Avoiding Turnover in the Slow Season
As a property investor, your primary goal is maximizing cash flow. Receiving steady rental income is a matter of keeping responsible tenants in your property. If the end of a tenant's lease is drawing near, you want to make sure that this termination does not coincide with a slow rental season. People tend to move between May and September, so the best situation is for the end of the lease to fall within this range. If your tenants are set to move outside of this window, you may want to renegotiate the lease dates.
Getting Tenants to Stay
If you want your tenants to stay in the long term, the most effective step you can take is to be a good landlord. If they have maintenance issues during their stay, be sure to quickly address these issues. Inquiries and concerns should be answered within a reasonable time frame.
Even if you are an attentive and fair landlord, tenants may still consider moving out at the end of the lease due to personal reasons. Here are some methods you can use that may get them to rethink their move.
- Offer a grace period for rent payments. Tenants may receive a paycheck at a time that makes first-of-the-month rental payments difficult to swing. If your tenants pay the total amount due each month, but pay a day or two late, you may want to offer a grace period. Grace periods offered to reliable tenants give them breathing room that can relieve some of the stress in their lives.
- Give your tenant an incentive to stay. If you have to look for a new tenant during a slow period, you could lose thousands. To get your tenant to stay, consider offering inexpensive gestures that show you care. Sending a holiday card with a small gift card inside sets you apart as a caring landlord.
- Offer a discount for the lease renewal. To give your tenants more incentive to stay, offer a discount for signing a lease for another year or two. The discount doesn't have to be large; even a $25-per-month reduction can persuade a tenant to stay.
Getting Tenants to Leave
If you are dealing with problem tenants and would prefer that they leave before their lease is up, there are some good options.
Offer a monetary incentive for tenants to move. If you want tenants to leave quickly, you can give them a monetary incentive to do so. Just be sure to stipulate that the property must be left in good condition when they leave—you don't want to end up paying even more for repairs and cleaning.
Provide solutions that will work for them. Helping your tenant find a new place to live by putting them in contact with connections who have a solution will show that you are not just trying to kick them out.
If your goal is to get your tenants to leave, be sure not to use scare tactics to do so. You could end up with a legal battle, and tenants are more inclined to do what you want them to when you treat them with respect and kindness.
Maintaining steady cash flow in relation to your rental property is a matter of keeping high-quality tenants. The best way to ensure that you are not left with an empty rental property when the rental market is slow is to make sure that the end of a lease does not fall during these periods. You should do this when you originally offer a lease, but property owners who haven't planned ahead can choose from several incentives and offers to make the most of their real estate investment.
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