Keeping Tenants is the Ideal Chicago Property Management option to maximise rental income.
Turnovers mean vacancies, during which you’re not bringing in rents, yet still paying the mortgage. You might need to repaint, replace carpets, and professionally clean the unit thoroughly. There’s the marketing—advertising the vacant unit, showing it, holding open houses, collecting and processing rental applications, running tenant screening reports on all applicants, plus calling employers and prior landlords.
If you hire the help of a leasing agent or property manager, they will charge you a month’s rent/rental commission for their work too. The bottom line is that turnovers will devastate your Return on Investment (ROI). So how can you minimize your turnovers and keep your properties occupied at (nearly) all times?
The key is to retain your good renters for the long term. You want them so comfortable in your property that the idea of moving is a headache they would only consider under the most dire circumstances. The key to this starts from the beginning of their tenancy, by creating a great relationship with them. This can be created either through a great professional management company or individual landlords. Responsiveness, trust, and a nicely maintained property are the not-so-secret ingredients to this.
Finding great tenants is the first step; and our previous blog post outlines the best screening processes for this. Bad tenants can end up needing to be evicted in the worst case scenario, or at the very least, non-renewed. In other words, signing a lease with bad tenants is just setting yourself up for quick, expensive turnover. Also, try to keep out renters who move frequently from one home to the next. If you want to minimize turnovers, lease to renters who are stable and have a history of living in one home for more than 1 year, and avoid month-to-month leases.
Communication is the next most important factor in maintaining tenants’ happiness and comfort in your property. By responding to maintenance requests, general questions, and complaints in a timely, friendly and professional manner you will create a positive relationship with your tenants that is essential to building a sense of trust, security and loyalty on both sides. If you have particularly quiet tenants who tend to not submit these queries, then try proactively reaching out to inquire if everything is going well and if there is anything they need to improve their quality of life in the property.
Small gestures such as birthday wishes, expressing thanks for good tenancy, and happy holiday sentiments can make a lot of difference when it comes around to discussing re-signing.
As Chicago emerges from the global pandemic, financial concerns are on everybody’s minds after the past year’s uncertainty. The tip that is especially relevant at this time, is to not increase the rental price where possible, or even to reduce rent slightly to encourage current Chicago tenants to re-sign for another year.
No matter how well you’ve done with any of the above tips, good renters won’t stick around if their neighbors are loud, criminally active, or are just plain rude. This is especially important for Chicago owners of multi-unit buildings, or multiple rental properties in Chicago.
Every month, look at which renters’ leases are coming up for renewal soon. If you have to ask yourself whether tenants are worth keeping, you already have your answer: non-renew them and get better renters. Multiple late rental payments, complaints from neighbors, excessively requesting maintenance requests due to negligence are all some signs that you should find better tenants. Landlords can constantly look for excuses and justifications to keep bad renters in an effort to avoid turnovers. Do yourself a favor and do not retain bad tenants! Great tenants who will live in your property long term are the best investment you will ever make.