The Complete Guide to Investing in Rental Properties by Steve Berges

Author:Steve Berges
Language: eng
Format: epub
Publisher: McGraw-Hill Education
Published: 2004-07-14T16:00:00+00:00

How to Keep Good Tenants

Studies show that the cost to keep or retain customers is only about one-fifth the cost of replacing them. Replacing customers as it relates to rental properties means replacing tenants. As tenant turnover rises, operating expenses, of necessity, will rise with them due to increases in advertising, cleaning, and all other costs associated with “make readies.” Conversely, revenues will decrease due to increases in vacancies. The result is a net adverse change in profitability. If a property owner can enhance the overall profitability of her rental units by keeping the customers she already has, then one could logically conclude that it makes sense to build customer retention into the framework for developing the very core of a sound business strategy. Positive changes in tenant retention are correlated directly with positive changes in service and value, whether they are real or perceived. The remainder of this chapter is devoted to three actions you can take to improve tenant retention immediately. By implementing the principles outlined in the following box, your real estate investment company is certain to enjoy a higher level of profitability.

How to Keep Good Tenants

1. The Golden Rule

2. Visibility adds value

3. Concentric circles

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