Why is tenant retention so important? If you have managed property before, you probably understand the value of long-term tenants. According to a research study conducted by a real estate firm called Jones Lang LaSalle, it can take up to two years to make up the lost income from losing a tenant. According to another study by Kingsley Associates, tenants are 3x as likely to renew a lease if they are satisfied than if they are unsatisfied. Therefore, it is extremely important to keep current tenants even if it means spending money to keep them happy.
1. Know your tenants and their needs.
Owning and managing commercial property requires that you know your tenants, their products or services, and their specific needs. An office space is going to attract different types of tenants than a retail space, and their needs are going to be different. Get to know your tenants, and learn how you can be proactive in satisfying their business needs. The more helpful you are, the more likely they will be to renew their lease.
2. Keep your tenants happy.
Keeping tenants happy is easier said than done, but it is essential for retaining tenants and maintaining a steady income.
Communicate. Tenant unhappiness often stems from a lack of communication or a misunderstanding of terms. Making sure that the tenant is aware of and understands the terms of the lease, maintenance schedules, and any changes to the property is an essential part of proper communication. Here are a few suggestions for maintaining open communication with your tenants:
- Have an email alert for every time that maintenance work is scheduled.
- Send a monthly newsletter to let tenants know of any changes that are being made to the property.
- A chat platform can be used for communication between you and the tenants, and it can also log all of the communication in case you need to refer to it later on.
Be responsive. This is an essential part of proper communication. If the tenant has a question or complaint, don’t wait days to respond. A complaint should be followed up with an acknowledgement or a proposed solution within 24 hours.
Make it easy. People who rent commercial properties want to go about their business with the least amount of interruptions from the landlord as possible. Set up systems where tenants can pay their monthly rent online, give the option for monthly or yearly automatic withdrawals, or provide other payment options based on their preferences.
3. Be professional.
Nobody wants to rent from a company that looks sloppy because it indicates that appearance isn’t important, and if appearance is unimportant, then the property is probably not maintained. Therefore, it is crucial to always maintain a professional appearance. If you hire a third-party maintenance crew or any third-party service providers, make sure they look professional as well because they are an extension of you and your company.
All communication and points of contact such as the website or payment platform should also be professional, clean, and easy. Larger property management companies could benefit from purchasing a property management software tool and website building software tool so that communication is streamlined and organized.
4. Maintain & Improve the Property as Needed.
Keep the property safe. When there are tripping hazards, fire hazards, and other dangerous components, a lawsuit is just waiting to happen. Make sure that you do as much as you can to make the property safe for the tenants so that they feel more comfortable conducting business in your space.
Keep debris such as fallen tree limbs out of the way of walking paths, and make sure that heaving pavement from tree roots is properly fixed in a timely manner.
Security cameras and systems should be installed so that tenants and their visitors feel safe on your property. If the tenants want extra security to protect expensive items on the premises, make accommodations within reason.
Maintain compliance with the Americans with Disabilities Act and the International Building Code to keep tenants and customers safe. To be compliant with regulations, the building will require steps with handrails and wheelchair ramps for any doors that are above ground level. Each commercial area of the building must be accessible to everyone, including those in wheelchairs.
Keep it pleasant. Well-maintained and clean properties tend to keep tenants longer than poorly-maintained locations. As time goes on, it’s easy to get accustomed to the way your property looks, so the appearance and technology often become outdated. Keep the inside and outside of the building up-to-date so that it doesn’t hinder your tenants’ business. Every year, go through a checklist to make sure that the floor, steps, ramps, railings, light fixtures, and ceiling are all in good condition.
Don’t underestimate the power of things like lighting and temperature. Be prompt about replacing light bulbs, and allow the tenants to maintain their desired temperature via a thermostat. Nothing is worse than working in an unbearably hot or cold environment.
In general, it is best to make accommodations and pay a little extra to keep reliable commercial tenants. Treat your tenants like investments, not like nuisances, and they will be more likely to renew their leases.