Importance of Tenant Relationship Management
Thousands of people every year take their first step into the world of real estate management, hoping to start their portfolio and earn some extra income. However, most discover that real estate management isn’t quite the passive income they were hoping for. A lot goes into being a good landlord or property manager. One of the most important factors for success is tenant relationship management.
Notably, your tenants aren’t going to want to pay their rent or stay with you if they don’t like you. Renters are willing to put up with a lot, thanks to the turbulent and less-than-stellar rental market. But you will also see thousands of videos, posts, and accounts that expose horrible landlords and their practices. In today’s age of the internet, that means hundreds to hundreds of thousands of people are seeing the bad actors in the real estate management field and know who to avoid. Similarly, you can also find plenty of videos from landlords themselves showing trashed houses and complaining about unpaid rent.
Now, some bad behavior is inevitable anywhere you look. Bad people exist on both sides. Some landlords and some renters have no respect for rental properties and don’t take care of them. Bad owners don’t bother to update or maintain their buildings while nickel and diming tenants at every turn. Bad renters don’t try to pay rent on time and destroy their space without a care.
However, as a landlord or rental manager, building strong professional relationships with renters can help increase their happiness and save you a lot of trouble. Keep reading to learn more.
Benefits of Tenant Relationship Management Skills
So, just how can tenant relationship management help both you and your renters stay happy? First of all, happy tenants mean long-lasting tenants. No one wants to have to move every year due to a bad landlord or building. By maintaining your relationship with your renter (and the building they’re staying in), you’ll guarantee yourself regular monthly income. And you won’t need to worry about what kind of person your next tenant will be.
In addition to the more-or-less guaranteed monthly rent, you’ll get a reprieve from costly marketing efforts and other upkeep services. Indeed, preparing an apartment or house for new tenants often proves costly as you’ll likely need to hire professional cleaning services and even replace wall coverings and carpets.
You may think that seeking short-term rentals might allow you to make more money as you’re able to more regularly up the rental price to match the market. However, statistics have found that the opposite is true. Focusing on short-term rentals is far more expensive due to the “increased effort involved in maintenance and management.”
1. Reputation
We’ve touched on landlord reputation earlier, but only the negative side. Good tenant relationship management will allow you to build yourself a positive reputation. Having a good reputation generally means two things: more potential tenants and more understanding when issues arise.
Word-of-mouth remains one of the most effective ways to bring in more clientele, whether you’re a store or a landlord. People trust people more than they do advertisements. As many renters have had an experience or two with bad landlords, most prefer to go with someone with a personal recommendation than risk another stranger. Your good reputation means your properties will spend less time being vacant.
And when people know your word actually means something, they’re very likely to give you the benefit of the doubt when issues do arise. Thus, if you’re having trouble getting something repaired in a timely fashion or if several things go wrong all at once, your tenant might call a run of bad luck and not typical slumlord behavior.
2. Conflict Resolution
Issues are bound to come up at some point with tenants. Maybe Dan in unit three is late paying the rent or Lily in the house on Oak stopped taking care of the lawn and it’s very, very overgrown. Or the new college kid, Dave, you just signed a lease with is already causing problems with noise complaints coming in from his neighbors every single night. Good tenant relationship management will make it easier for you to reach out to these renters and help resolve the issue at hand.
Many people tend to isolate themselves when things go wrong. This behavior is especially common in rental scenarios, where individuals are afraid to lose their homes.
In cases like Dan or Lily’s, a little compassion can go a long way. Try not to immediately jump to the worst-case scenario, even if they’re new tenants. First, reach out to your renters via their preferred method of communication. You might get Dan on the phone and find out he lost his job or a visit to Lily leads you to discover her health has deteriorated and she can’t afford to hire someone to care of the lawn.
Finally, Dave has been causing a ruckus and annoying your other tenants, but he tells you through text that he’s sorry. His mental health has taken a turn, and he’s trying to find ways to feel happy again.
These individuals aren’t trying to do you wrong – they’re simply going through their own hardships. Because you didn’t immediately send threats of eviction or fees, you now have a chance to resolve these issues and keep your tenants.
What You Can Do
Your choices here come down to three main factors: what your tenant can do, what you can afford, and how long you can afford it. As much as you don’t want to kick anyone out for struggling, you can’t help anyone if your building is foreclosed on or if you have to sacrifice vital repairs to keep someone there. For Dan, you might be able to strike up an agreement: he pays what he can out of savings now (if anything), and once he has a new job, he pays extra on each rent until the deficit is filled. How long this agreement is valid for is up to you.
For Lily, perhaps you can include lawn care in her rent for an affordable fee. Or, if you own multiple properties, do you have another available unit that might be more accessible for her?
Finally, with Dave, consider setting a limit on his bad behavior. His neighbors won’t want to deal with it forever, and you’ll start losing other tenants if it keeps up. Write up a formal agreement that if he hasn’t stopped the noise in so many weeks, he’ll be hit with a fee on his rent. Or, that his lease won’t be eligible for renewal. Partying and having fun is still possible while respecting your neighbors.
Whether your renters meet their side of the agreement is on them. What matters is you gave them a chance to resolve their issue and, ideally, you’ll have a quality, long-lasting tenant as a result. Of course, you’ll want to find a balance between compassion and complacency. Good tenant relationship management allows you to make agreements with your tenants rather than fighting with them or losing them outright.
3. Minimize Late Rent
When you care about something, you pay attention to it. This principle also applies to paying the bills and rent. Renters who hate their landlords rarely care if their rent is paid on time. Of course, in many states, you can evict tenants who are even one day late. But this is often more hassle than it’s worth (assuming you are getting the rent, even though it’s late).
Having good tenant relationship management skills allows you to build a rapport with your renters, thus encouraging them to get you their rent. No one wants to risk losing a quality landlord.
It’ll also take some of the overhead off of you, as you can trust you’ll get on-time payments. As a result, you won’t have to worry if the mortgage and repair bills can get paid on time.
Lakewood University
Lakewood University is an accredited online school that offers a variety of degree and certificate programs, including Real Estate Management with lessons from Jemal King. We have rolling enrollments and asynchronous courses. In other words, you don’t have to worry about missing a lecture or running late to class. If you plan on enrolling in college while working, Lakewood University offers the flexibility you need to earn your degree.
Don’t hesitate – reach out to our admissions department today to learn more!
