What do you do to minimize tenant turnover?

[Nick Miller]

When buying a property I always calculate 10-15% for delinquency and vacancies. With my portfolio this is a conservative average however I have a fourplex with small one bedroom units that seems to take a long time to fill. People either love or hate these units as the bathroom and kitchen are small and the units are all a little dated but comparable to neighboring properties.

We have decided to keep the units in the as-is condition as the units are not bad they just take a little extra time to fill..

My question is when you do not want to update units but you want to cut turnover what is the best strategy? Would you lower the rents, lower tenant standards, increase the advertising budget or is there another creative trick you know of the lower turnover time?

[Patrick L.]

The biggest thing is when something breaks I make sure I immediately get someone out there to fix it. I also don't raise rent on my tenants that pay on time that I want to keep. (market rate on rent here hasn't gone up too much here in the last 5 years anyway) Those are the two biggest reasons that prospective tenants give me for why they are looking to move.

Another thing I do for tenants that have been with me for a while is when the lease is up for renewal I'll offer to do a small upgrade of the tenant's request upon the signing of a new lease. It's generally something that costs a few hundred dollars and improves the property. (a new appliance, a couple new light fixtures, adding a flower bed, a new kitchen faucet, etc). It's a good way to get to something small that has potentially been bothering the tenant.

I have more than 40 rentals and I generally have 1-2 vacancies a month, under 5% for the year.