Category: Tenant Retention
In the old days when you needed to find a good tenant you called the local newspaper and spoke to a sales rep who’d help you craft a catchy phrase or two for a listing in the classifieds. Hardly any renters are reading the paper nowadays, so we landlords are on our own.
Below are my thoughts on how you can become an effective Craiglist marketer. While I use Craiglist a lot because it works well for property management in Los Angeles, Ventura and Santa Barbara, California, the tips I share below apply to other social media as well.
To compose an effective Craigslist ad you must put yourself in the shoes of a potential tenant. If they go to Craigslist in a mid-size city they will be faced with hundreds of new rental postings each day. If they live in a metropolitan area like Los Angeles, this can reach thousands. There is no way a prospective tenant will sift through that many listings to find your property. Therefore, there are two requirements for successfully writing a Craigslist ad. The first is easy, you have to renew the ad as often as Craigslist allows in order to stay on top of the pile. The second is to write an ad with a lot of search terms (aka keywords). Prospective tenants enter specific items they are looking for in the search box and if you are lucky they will make it through 30-40 ads. Being in the top 30-40 ads of a search results page will determine if you wrote a successful ad.
Below are keyword categories related to location that I would highly recommend including in your ad:
- A local college or school if one is nearby
- Nearby parks
- Beaches, lakes, recreation areas
And here are some keywords related to the condition of the rental and its amenities to include:
- Granite counters
- Hardwood floors
- New carpet
- New paint
- Patio, yard, balcony, fireplace
Also, you should always use the word “Pets” if you allow them in your rental. Simply checking the “pet friendly” box in Craigslist isn’t good enough. Also, list nearby transportation such as subways, buses and trains.
Here’s an example of a poorly written ad:
Nice 2 bedroom 2 bath property located close to everything. The property was upgraded and has many amenities. Owner pays water and trash. Ready now. Available for 2,000/mo.
Here’s an effective ad:
Large remodeled 2 bedroom 2 bath house located in West Beach. Close to downtown, shopping and restaurants. The unit features a fireplace, large yard with patio, new paint and hardwood floors. Small pets ok. Available now for $2,000/mo.
Notice the liberal use of search keywords which I underlined above. The difference between these two ads might initially seem minimal, but the results they produce are substantial. The second ad was written with 16 keywords that tenants search for.
This is one of the reasons I think most people who want to rent out their homes benefit by having a professional property manager. A few simple techniques learned over time can save a lot of money. Maybe in another post I’ll discuss how to screen out the good potential tenants from the bad ones in the dozens of replies good ads get on Craigslist. In the meantime, remember that each day a property sits vacant represents lost revenue. And the benefits of being free of the stress of owning a vacant rental home are priceless.
Justin Egerer owns Sandpiper Property Management, a full service property management company whose portfolio includes single-family homes, apartments, condos and commercial real estate in Santa Barbara, Ventura and Los Angeles, California.
Losses from man-made and natural disasters in the U.S. during 2012 will exceed $140 billion. The most notable being Super Storm Sandy, which ruined thousands of New York and New Jersey rentals, both along the coast and inland.
Most landlords — with the aid of private and government insurance — will eventually recover. The prognosis for renters isn’t so good. And their financial wellbeing could have easily been protected.
Industry studies show that nearly 100% of rental property owners are insured. Yet only about 40% of tenants voluntarily purchase — or are required — to have renters policies.
“I know it’s a good idea,” said a professional property manager responsible for over 300 single-family rental homes. “When new tenants sign their lease, I suggest they get insurance because their personal belongings are not my responsibility,” she said. “But I don’t make it mandatory.”
Maybe she should. Increasing numbers of large property owners don’t give renters an option.
The average person renting a two-bed room apartment has over $20,000 in personal property. A renter may not think they have much: a few clothes, a sofa they got off Craig’s List, some dishes. But consider the replacement cost of an entire wardrobe, a smart phone, an iPad, a laptop computer, flat screen TV, X-Box game console, and even some old furniture. Moreover, what if the renter has a spouse and children? The costs could wipe them out.
Property managers and property owners have a stake in this too. A renter with a personal safety net is far more likely to maintain a lease agreement should he or she be victim of a fire, burglary or need temporary housing due to a disaster. Renters insurance covers these expenses. In some cases, for as little as $10 a month.
Owners with insured tenants also have higher operating income and tenant satisfaction. If a tenant with renters insurance causes, say, small damage to a unit, rather than getting in a dispute with the renter, or coming out of pocket to cover the cost of the repair, the landlord can be reimbursed by the tenant’s insurance.
Due to climate change, experts say things will get worse in 2013 and beyond. There are going to be more — and more excessive — heat waves, droughts, floods and hurricanes. “Nowhere in the world is the rising number of natural catastrophes more evident than in North America,” according to Munich RE, the worlds largest reinsurance company.
Protect your investments, whether you’re a renter or owner. If you’re a landlord, consider making renters insurance a requirement of occupancy. If you’re a tenant, call an insurance agent or go online and find a policy that meets your needs and your budget.
Although finding new tenants in this landlord-friendly rental market may not be difficult, retaining good tenants is still more cost-effective in most situations.
Finding new tenants is expensive. When an old tenant moves out, the process of finding and keeping a new one involves deep-cleaning and repairing the unit, posting listings in multiple locations, holding showings and other time- and money-consuming events. Add this to the fact that no tenant means no incoming rent, and landlords have many reasons to want to maximize their tenant retention plans.
Building good communication with tenants is the first step toward encouraging lease renewals. In addition to responding promptly to maintenance needs, plan to check in with tenants about once a quarter to make sure things are going well. For multifamily units, you might consider sending out a regular newsletter, hosting an occasional community party, or surveying your tenants to make sure you’re receiving key feedback about the property on a regular basis.
When it comes to lease-renewal specifically, contact tenants a couple of months before the lease expires to get a sense of their future plans. If you initiate the conversation early on, you’ll have a better chance of negotiating renewals from tenants who may be on the fence about whether to leave or stay.
Consider offering a small bonus to tenants who choose to renew their leases. Some landlords offer a week or two of free rent. Others offer upgrades such as new carpet, fresh paint, better appliances, or other attractive improvements. You could also try partnering with local businesses to offer good tenants health club memberships, grocery store gift cards, and other perks.
Start a Referral Program
If your tenants are determined to end at the end of their lease, you may want to offer a small cash incentive for any referral they make that results in a signed lease. If your current tenants are well-mannered and responsible, chances are good that their friends will share these traits.