In my opinion, if you want to know how to find and keep good tenants: you’ve gotta be on F.I.R.E.
F.I.R.E. is my acronym for:
Friendly, Interested, Respectful and Economical…
And pretty darn easy to remember, am I right?
There’s a lot of opinions about tenants and how to treat them…
This is just mine…
In short, my philosophy has always been to treat people how I want to be treated.
How to Find and Keep Good Tenants to SAVE Money!
Rather than seeing the tenant as a “monthly paycheque” and only as a way to MAKE money…
I figure if I show a little compassion, respond to their concerns, and take care of the property, they’ll stick around – which SAVES me money in the long run.
That may sound like a no-brainer – but believe me – I’ve met countless landlords who will try to avoid any and all costs because it “cuts into their cash flow”.
We’ll talk about this later, but I want to touch on rental increases.
I’ve been in forum debates enough times to know there are landlords that want to “stick by the rules” and raise rent EVERY time possible…
Which I suppose is one way of making money..
But like I said, I want to SAVE money… so I choose to follow the value of a LOYAL customer (see above).
I do this with gradual rent increases that are somewhat in-line with the market & hopefully prevent someone from moving out.
It doesn’t always work…but my track record suggests I’ve got a 90% stick rate of tenants that are with me for several years. (read: 5 and over)
So here’s how to find and keep good tenants using the F.I.R.E. method.
Friendly:
This is a no-brainer – if you’re friendly to enough people, your life will be so much better.
So why stop that friendliness with tenants?
A friendly relationship with your tenants go a lot further than one where you’re the dictator.
And it doesn’t have to be hard. Stop by (you or your property manager) to collect the rent once in a while so you can have a friendly chat.
Be proactive – ask if there’s anything more you can do to make them comfortable.
Note – this is NOT a surprise inspection, it’s just friendly communication.
Imagine what happens when a tenant feels like they can call on you as a friend to report something that could be troublesome in the future rather than being terrified to bother you because you’re always pissed when they ask for something.
THAT’S going to save you money…
Interested:
On the path to knowing how to find and keep good tenants, BE INTERESTED in them.
It should go without saying that you need to have a genuine interest in your property and investment…but when it comes to tenants, I see a lot of landlords drop the ball.
They don’t really give a crap about their tenants.
And by that I mean they don’t ‘bend’ a little to make the tenants feel more comfortable, OR look at things from the tenant’s perspective.
Remember, you and me are not living in our rental properties 24 hours a day.
So I’m always listening to the things my tenants and property manager say.
Of course, there’s a fine line between obnoxious requests and complaints and genuine stuff that is just going to make them feel better.
As an example: you may think a “few nail holes” doesn’t warrant repair or touch up. And the average says most tenants won’t care about them either.
But what happens when someone DOES? Are you really going to squawk over a can of touch up paint?
The way I see it, they care about how the place looks. And that’s a GOOD thing, don’t you agree?
Being interested in what the tenant has to say is an important part of your business…
It’s just like listening to your customers (because they ARE your customers). The businesses that ignore their customers are the ones that fail in the end.
Respectful
I believe respecting my tenant’s privacy goes a long way.
They MUST feel like it’s their home – so treat it that way.
Now you may think “it’s MY home and the landlord tenant board legislation says….”
That’s all fine and dandy…
And I know we have “rights” as landlords to inspect and so forth…but this is about “how to find and keep good tenants”, right?
So in that context, reducing your “right to inspect” and keeping it on a friendly “visit” will really make things so much easier.
And yes, I realize HOW important it is to inspect your properties – so I’m NOT saying let this slide either.
All I’m saying is if you’re legislation indicates you can legally inspect every 90 days – maybe do it every 180 days.
If THAT freaks you out, WHY?
Did you take the time to choose the right tenant in the first place? Or was it just about “getting someone in to fill the vacancy?”
Anyhoo, you know where I’m going with that…
In my opinion, if you’ve followed the F.I.R.E. rule so far, you’ve built good report and a friendly relationship with your tenants because you care about them and are interested in making them as comfortable and safe as possible.
When you want to visit them, GIVE them the respect they deserve.
Allow them ample time – don’t just show up unannounced. ( I personally don’t do the “surprise” inspections)
I also do not extend my right to enter the unit without them there as long as I’ve told them 48 hours in advance – unless they’ve specifically asked me or my property manager to do something while they’re at work.
And here’s a tip: IF by chance you are going in without the tenant there – respect their belongings and property.
BRING them a gift. Even if it’s a $10 gift card. SHOW them you are grateful for them taking the best care of your property.
DON’T overstay your welcome.
Economical
The last [important] piece of the puzzle in understanding how to find and keep good tenants is about keeping rent fair.
Let’s face it – tenants are out there because they are in a situation and/or believe renting is a more cost-effective option for them.
The rental market is a pricing game.
It’s also a comparable marketplace.
So it’s important to understand your market and the ideal tenant you want to attract.
My personal choice is to keep my rents at the top of the marketplace because it attracts higher quality tenants for me.
That said, it does NOT mean I’ll never lower the asking price if it’s not renting.
AND, like I’ve already mentioned, I don’t have a policy in place to raise rents as much as possible every year.
In fact, there’s many years I’ve gone without raising rents at all.
Some investors call me crazy and that I’m “losing opportunity” to make more cash flow…
However in my mind, losing and replacing tenants is much more costly.
And by following the F.I.R.E. rule of thumb on how to find and keep good tenants, I can happily say that I’ve been able to sleep these last 8 years or so of investing 🙂
Hope this helps you…