As an investor, it’s crucial to find every opportunity to increase your ROI on an income property. When you buy, you’re carefully analyzing income, expenses, and purchase price to negotiate a great deal. When you sell, perhaps decades from now, you’ll want to assess the market and determine how to get the most for your property. But what about the many years in between? Of course you’ll be carefully considering rent increases and improvements, but many landlords overlook a key opportunity for ROI – TENANT RETENTION!
You’ve gone through all the work to market your rentals and carefully vet your tenants. Once you have great tenants, you’ll want to keep them. Vacancies will mean periods of no income, plus more time and money spent finding new tenants. A few weeks or months of this over time will really hurt your bottom line. Here are some tips to keep rent coming in for the long haul:
- Understand Your Market
Toronto’s rental market is red-hot and competitive. This is a great city to be a landlord. Even still, there are a lot of great rental opportunities and tenants still have standards and expectations! You need to understand where your property sits. Is it outdated? Overpriced? Take some time out of your year to visit vacant lease listings, or at least browse MLS. Understand the opportunities available to tenants in the area and how they will impact perception of your own property. And if your current tenants do leave, be sure to ask why! Their feedback will only help you.
- Get To Know What Your Own Tenants Want
Again, your own tenants are a great resource for valuable information. Inspect their units twice a year to keep an eye on things, but also to sit down and discuss how their tenancy is going. If they could make any changes to the property, what would be improved? Keep a list and, when able, act on their desires. Not only will you be improving your rental property, but you’ll be a star landlord in their eyes – someone who values their tenants, not just the monthly rent cheque.
- Leverage Current Tenants To Find New Ones
Love one of your tenants who is on the way out? Or maybe you have another unit on site or nearby that needs filling? “Like attracts like”, and great tenants are likely to know other great tenants, who will place similar value on you, the best landlord in the city! Seriously though, your tenants may be more than happy to refer another to you.
- Screen Tenants Carefully
We’ll be writing more on this, but you would not believe how few landlords take care when screening tenants! An Equifax credit score and Letter of Employment do NOT tell you everything you need to know. Tenants have strong rights in Ontario (as they should!) so avoiding a bad tenant at the beginning is far, far easier than having to evict one later on. And this isn’t just about tenants who wont pay on time or who might be reckless with your property – what about tenants who move every year? Ideally you’re finding people who want to stay. So interview them. Get to know applicants. CALL their references and employers. Do your due diligence!
- Be Personable
Make no mistake, the landlord-tenant relationship is a professional one. But that doesn’t mean you need to be a nameless, faceless cheque collector and problem hotline! Keep notes on what you learn about your tenants and bring it up in conversation. See something online they might appreciate given their hobbies or line of work? Send it over. You won’t speak often, but when you do, take an opportunity to ask them how their doing. What about their kids? Real estate is an investment that comes along with people and what matters most to them – their home. Showing them that you care will go a long way.
All of these are little things that overall will make you a strong, competitive landlord. Acquire and keep good tenants and you’ll make the most of your investment!