Importance of Retention
Retaining existing tenants and residents is important because it helps owners and managers avoid the expense and effort of tenant turnover. Keep in mind that retention is a process, not an event. Renewing an existing lease is more profitable than finding a new tenant for the following reasons:
- Renewal eliminates the loss of rental income while the space/apartment remains vacant
- Renewal reduces marketing and leasing expenses
- Preparing a vacated space/apartment for a new tenant typically costs more than improving a space/apartment for a current tenant
- The relationship with current tenants includes an understanding of their payment history and respect for your property and neighboring tenants, which must be established all over again with a new tenant
- Retention creates loyal customers and promotes positive word-of-mouth advertising and referrals
Comments
Great article and straight to the point.
However, you have to keep in mind that owners want to see rents go up and tenants don't. I just wish owners gave managers more room to negotiate with residents about their renewal rent. I understand that if you don't ask for the rent to go up they will never offer to start paying more. I just think if they would ask for XX and then be ok if we settle at NN everyone is happy and residents will like the fact that we listened to their needs and came to win-win agreement. I guess I can speak for everyones owners/managment company. It just seems that the one I work for has a pay it or move attitude.
Tenant retention is definitely more profitable.
- Christopher Mellen | Flag this comment for review