You have a vacancy. Now you get to clean up the unit, do some painting and carpet cleaning, tidy up the front and put it on the market. Now write the ad. That might take a while since the last one didn’t work too well–in fact, the only calls you got were from people who shouldn’t rent a Barbie playhouse.
You’re still not done. Now you have to place the ad and pay for it, unless the only place you run it is Craigslist. Then there’s the sign. You have to put one of those up. And the flyers that go outside the unit, you need to create and print those.
Finally done with all the preparation, now you have to hope and pray the phone rings and at a time you can concentrate on the call about your vacant unit.
Wow! All that work and much of it could have been saved.
Of course, if you breathed a sigh of relief when that tenant moved out, that’s different because all that preparation for that fantastic new tenant is worth it.
But this tenant was a pretty good one. What if you will miss her? What if the reason she’s moving is not for a new job in a new city or to buy a house? What if she told you “it’s just time for a move”? Maybe you could have avoided spending all the time, effort and money finding a new tenant.
What’s the secret? There’s no secret really. Small Business Marketing Strategies estimates, “Acquiring a new customer can cost 6 to 7 times more than retaining an existing customer.”
An article in Entrepreneur Magazine pointed out, “It’s a truism that long-time customers are vastly more profitable than newcomers, yet most companies keep better track of office supplies and magazine subscriptions than they do of their customer relationships.”
That’s for normal brick and mortar businesses where they send salespeople out to call on existing customers and find new ones. But landlords, assuming their units are relatively full, can concentrate on the customers they have. Keeping an existing tenant costs even less than the retail industry standard for keeping a customer.
You have to make repairs anyway, so there’s no extra cost there. You have to do preventive maintenance anyway, so there’s no extra cost there, either. You will have to repaint or recarpet sometime, so there’s no extra cost there, either. The only extra cost might be for saying thank you occasionally and patting yourself on the back.
Do you have a tenant-retention plan? It doesn’t have to be complicated.
How about a “thank you program”? You can reward tenants every so often with a $20 gift certificate to such places as Amazon.com, Starbucks, gas stations, local department stores, or anywhere else your tenants might like to shop. Gee, $20! Why that would buy a whole line in the Sunday classifieds for about an hour. At lease renewal, you could also provide a catalog of gift items that your renewing tenants can choose from that cost maybe $75. That’s a whole line in the Sunday classifieds for an entire day. One such website is www.chooseyourgift.com. You can even set up your own private-label gift site. That should truly impress your tenants.
How about telling your tenants what you did to make their home more pleasant and livable? Believe it or not, tenants do not think about their landlords all the time, or even that often, unless their landlords aren’t doing their jobs. Then they think about landlords a lot. Since you do your job, your tenants don’t think about you that much except when they write the rent check. So tell them all the wonderful things you did to keep their homes great places to live. You can do it with a short note, an email or a full-blown newsletter, depending on how many properties you have. What’s important, though, is that they know what you do for your properties and them.
But even if you aren’t willing to spend money and time on your good tenants to keep them living in your property, at least send a thank you note. If you hand deliver it, the cost is only that of the paper you wrote it on and an envelope Mailing costs a little more, 44 cents. Is it worth 44 cents to keep a good tenant?
They don’t know you care unless you tell them. There are numerous ways to tell your good customers you care and to keep them as your customers. In fact, if you do it right, they might never move. Just think, a long-term, regular-paying, good-neighbor tenant.