​Why Good Tenants Move Out - And How You Can Prevent It

Good tenants are the bread and butter of your real estate investment business - without them, you’re not making any income off the property. The trouble is, truly good renters can be hard to come by. That’s why it’s so important that you, as the owner, take steps to retain the good ones when you get them.

There are lots of things you can do, but understanding why people decide to move is the first step to preventing it from happening. Now, there will obviously be times when people just have to relocate, regardless of the things you do to try and convince them to stay. But there will be other times when your actions do make a difference, and it’s moments like these that will keep your property cashflowing with great renters.

Cost

One of the biggest drivers for tenants deciding to move somewhere else is cost. With rental rates steadily rising in most markets across the country, you can be sure your tenants are feeling the crunch - and keeping their eyes open for less expensive rentals. If your property is priced competitively when compared to other similar units in your area, you should be just fine. However, if your rates are significantly higher than your neighbor’s, you’re going to find yourself looking for new tenants. It’s critical that you stay in tune with the rate trends in your neighborhood so you can keep your rates comparable and your unit occupied.

Space

Another issue that can motivate tenants to look for a new home is space. People get married, they have kids, they end up needing more room. Or the opposite happens, where people split up, or their kids grow up and move out, and then they wind up needing less space. This one is tough, because you can’t easily change the space you have with your rental property. Sure, you can add an additional bedroom, but doing something this extreme to satisfy one tenant probably isn’t worth it. The only time I would recommend any type of a renovation like this is if your property is the oddball on the block, with only 1 or 2 bedrooms, and all the other houses have 3. In a situation like this, adding an extra bedroom makes sense because it puts you on par with other properties in your neighborhood, plus you can justify a rent hike. Another option is to get creative with the space you do have, by adding room partitions or additional storage. There’s a chance changes like these may entice tenants to stay, so it’s worth exploring these options when space is an issue.

They Want to Buy a House

For many tenants, renting is a short-term plan, with the ultimate goal being to own their own home. There’s nothing wrong with this, of course, other than it means you don’t have renters! If their plan is to buy a house one day, there’s not a lot you can do to change that, short of keeping your rent competitive and your unit attractive. What you can do, however, is consider how you can use their plans to your advantage - namely as an exit strategy for yourself. Unless you plan on holding onto the property for the rest of your natural life, this could be a good opportunity to sell it if your renters are interested.

Good tenants are a valuable asset that will keep your property cashflowing, so it’s critical that you keep them happy and ready to renew that lease each year. Understanding the primary reasons why people decide to move is an important part in that. Use the information above to help you better understand your tenants and their motivations, as well as what you can do make it worth their while to keep renting your property.