A Tenant Retention Plan in 8 Easy Steps
Whether a property is retail, office or industrial, retaining tenants is vitally important to maintaining cash flow from rent. Therefore, landlords and property management must strive to implement measures that will keep tenants satisfied so they’ll be more apt to renew their lease rather than move. Of course, some attrition is inevitable, but having a tenant retention plan in place can help keep satisfaction high so you can avoid the costs of replacing a tenant. Here are 8 steps you can take to help retain tenants.
Put It In Writing
Goals written down are goals achieved. Therefore, a tenant retention plan is best laid out in writing. Be sure to include detailed objectives and quantifiable goals for each tenant.
Know Your Tenants
Not only should a retention plan include a profile of each tenant—the type of business, owners’ names and contact information, lease highlights and tenant history—but also a record of your interactions and how you’ve gone beyond the requirements of the lease to be helpful. Mentioning these incidents may influence a tenant’s decision to renew.
Stay in Touch
Make a plan to communicate regularly with tenants in the way they prefer whether that is by phone, text or email. And be sure to schedule face-to-face time, too. The better you know your tenants, the better you’ll be able to anticipate their needs and keep them happy. Don’t forget to record feedback from formal as well as informal communication in the tenant’s profile.
Management by Wandering Around
Not every interaction with your tenants must be scheduled. Let them see you on the property, inspecting the building and even chatting with customers if you’re in a retail center. In case you haven’t heard, 80 percent of success is showing up! So wandering around is far from aimless, and may actually offer you opportunities to see and hear what is on your tenants’ minds at the moment.
If 80 percent of success is showing up, then the other 20 percent is following up. Respond as quickly as possible to a tenant’s concern or complaint. Listen to what they have to say, be courteous and don’t get defensive. When the solution will take some time, keep the tenant apprised of your progress. Although being proactive and solving problems before they arise is always preferable, showing tenants that you aim to help can be an influence when it’s renewal decision time.
Know the Market
Understand the makeup of properties in your area so you can be competitive. Consider who their tenants are and their vacancy rates. What are the strengths and weaknesses of nearby properties that are similar to yours? You can use this information to develop incentives that will help you retain your best tenants.
Maintenance and Upgrades
The physical condition of a property speaks volumes about your commitment to tenants’ success. No matter what kind of business they have, tenants always want to welcome customers or clients to a space that is clean, attractive, safe and functional. So while maintenance and upgrades may cost in the short run, they are likely to pay you back with tenants that you’ll have for the long run.
Losing a tenant occasionally is unavoidable. Sometimes a tenant must leave for reasons that are out of your control, such as when they need a bigger space that your property simply cannot provide.
Schedule an exit interview so you can find out details about why they’re leaving, where they are going and what if anything you could have done to serve them better. Information gathered during an exit interview can help you avoid mistakes with new tenants in the future.
A well-developed tenant retention plan may ultimately be able to save you money and effort, because taking care of tenants typically costs less than finding new ones or having a vacancy. Your efforts to retain tenants can benefit both them and you.
The information contained in this article is general in nature and should not be construed as financial, tax or legal advice. As with any financial or legal matter, consult your tax advisor and legal counsel.
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