As an owner of rental properties, there are a lot of different concepts you should understand if you are trying to build your business, and one is called tenant turnover. Do you know what this term refers to and its importance? Do you know how to decrease it and why this matters so much? Here are some essential things you should know about tenant turnover that may help you improve your rental property business.
The Definition of Tenant Turnover
The term "tenant turnover" refers to the rate at which you lose a tenant and get a new one. In other words, it indicates how often your tenants leave and how often you must find new ones. The goal with tenant turnover is to minimize it as much as possible. If you have a high rate right now, you should aim to reduce it. If your rate is currently low, you should aim to maintain a low rate.
The Reason It Is So Important
There are several reasons why your tenant turnover rate is so important, but the main reason is that a high tenant turnover rate costs money. Every time a tenant moves out, you lose money, unless a new one moves in the same day and you do not have to invest any money into the unit. How often does that happen, though? In most cases, there is a period where the unit is vacant, and this period is often necessary for you to complete updates and repairs and to have time to find a new tenant for the unit.
It is also important to reduce this rate as new work is created each time a tenant moves out. When you find out a tenant moved out, you may have to paint the unit, clean it, and make repairs. Preparing a unit takes time and money. You will then have to advertise for a new tenant, and this also takes time and money.
Ways to Reduce It
There are numerous ways to reduce your tenant turnover rate, and one is to develop a relationship with your tenants — treat them well and address all their needs quickly. Secondly, you should aim to provide quality apartments to them, and you can also offer incentives to encourage good tenants to stay.
You probably have a million duties to accomplish each day for your rental properties, and you might not have time to focus on this one aspect. The good news is that you can hire a company to handle this for you. To learn more, call or visit a local rental property management firm today.