For years Hiu was our go-to local sparky, taking care of all things electrical in our rentals business until he and his family decided to return to their native Canada. Recently I had a call from Hiu asking for my help. He has an investment unit in a large complex that has been under the management of the onsite managers. Hiu had been frustrated at the consistently high turnover of tenants at his unit. He never seemed to secure more than 6 month leases, and none of his tenants ever renewed. His unit had started to feel a bit like a revolving door and his downtime was significant too. The wear and tear created by this high turnover was starting to take its toll and his unit was looking worn and tired. Hiu felt his current managers weren’t looking after his best interests and that a change was needed.
Hiu’s main issue was that his property managers weren’t qualifying tenants when his property came up for rent. Hiu wanted stable long term tenants but instead ended up with a succession of itinerant, short term tenants. This wasn’t helped by the fact that the unit was always advertised at above market rates. This lead to longer than normal vacancy periods and also meant that his unit was more likely to attract those tenants unwanted by others. Meeting the market when his property comes up for rent will attract a wider selection of potential tenants allowing us to pick the very best candidate. Good tenants who are looking after your property are worth their weight in gold. Good tenants guarantee a reliable cash flow, and good long term tenants mean a lower turnover rate, minimising your rental downtime and creating less wear and tear on your property.
Presentation is key to attracting the best tenants and this was also a factor hampering Hiu’s unit in the marketplace. Keeping on top of maintenance is so important. A clean, well presented and well maintained property will have the edge when it comes to tenant appeal. A coat of paint, new floor coverings, or new window furnishings can make a big difference to your property for a relatively small cost. In the case of Hiu’s unit, it felt dark and the paint colours were dated and scuffed, so a repaint of the interior in a light colour will dramatically increase its appeal. This coupled with some fresh photography and a well written online advertisement will help his unit stand out from the rest.
Once new tenants have been secured for Hiu’s unit, retaining them becomes the focus. Retaining good tenants makes very good economic sense. Keeping rent increases fair, and in some cases, forgoing an increase in rent can mean the difference between a tenant staying on, or looking to move elsewhere. Offering a longer than usual lease term is also something to consider. An 18 month lease may have extra appeal to the tenant who wants stability, and appreciates that they are safeguarded from a rental increase for this period.
Ultimately you want a property manager who understands your property goals and will work with you to achieve them. For Hiu, at the end of the day it was not all about the money. Having stability and longevity with his tenants and the peace of mind that comes with this was paramount.