Renters are the lifeblood of property investment. Yet sometimes they’re seen as a necessary evil. Or purely part of the money-making equation. As an investor you’re often distanced from the tenants. But there are strong reasons why they should be carefully cultivated and nurtured. Good, committed renters give you stable income and ensure there are no difficult periods where your property is vacant. However, beyond that, it’s worth thinking of renters almost as partners in achieving maximum capital growth for your property.
Here’s why: It’s critical to have a property that’s desirable and livable as this will attract a better class of tenant. This has been at the forefront of DPN thinking in the creation of the new products, for example, the DPN CASA Designer series or DPN CASA Dual Income home. It’s been clearly shown that having a dodgy dwelling will only attract a dodgy tenant. Do you really want weeks of non payment of rent? Or having neglectful renters who will trash the property and leave you to pay hefty bills in repairs? As CASA shows, it’s very possible to have a highly attractively designed property that really doesn’t cost very much and will yield high capital returns. So finding a suitable property that you yourself would want to live in, is the first step in the process. This then immediately gives you a better choice of possible tenants.
Once you have a desirable tenant, one that has a stable job and wants to be committed to the property in the long term, it’s now in your interests to keep them. Just as much as the tenant has had to impress you or the property manager to be selected to live in your investment property, equally you should work to keep them onboard.
1. Ask for suggestions: Actively seek out their feedback. Perhaps once a year you can approach them for suggestions about how the property could be improved. Remember that they are actively living there and can provide you with useful feedback. You’d be surprised to find that most of their suggestions won’t cost a fortune and are often practical. Perhaps the bathroom is due for a renovation? Or the walls could be repainted? This leads to the next point…
2. Give them a stake in the property: If the tenants feel they are being listened to and are happy with the improvements to the property this gives them a feeling of ownership and a strong connection to the residence. They are more likely to stay in the long term and take better care of the property.
3. Have a personal connection: While it’s generally best as an investor to use a property manager it doesn’t hurt for the tenant to know who you are. They’re more likely to look after the property if they see you as a person not a shadowy, mysterious landlord figure. While all communication should go through the property manager, sending them a card at Christmas or meeting them at a property inspection and talking to them directly about any issues they have living in the property helps to personalise their experience.
4. Keep rent rises to a minimum: There’s no need to be greedy for a few extra dollars a week if you lose your long standing tenants. As long as you’re pegging the rent to be roughly in line with the market your tenants won’t complain.
5. Act promptly, give lots of notice: Always act speedily to attend to any minor issues that the tenant brings up. Give them as much notice as possible for any work or anything that could cause a disruption to their lives. Try not to see any requests they have as a mild annoyance but respect that if they’re excellent tenants they will generally have valid concerns.
Ultimately cultivating a good relationship with your tenant pays dividends. They have a better experience and are more likely to stay. Any maintenance and improvements you make to the property on their bequest adds value to the residence and thus improve capital growth. As an investor you want a stress free rental experience. Having first–rate, long term tenants ensures this will happen.
Yes they’re paying you rent but you can also look at this from the point of view of a working partnership. You both have stakes in the property and both want it to be livable and high quality. Keeping this in mind will enhance your property journey.