High tenant turnover represents a serious problem for London landlords. In the most basic sense, frequent tenant turnover increases costs, takes away from the sense of community and relationships, and it can drive potential tenants away. The good news, though, is that London has some of the lowest tenant turnover rates in the UK, just behind Birmingham. Unfortunately, that tenancy is still only an average of 21 months – not very long.
Given current turnover rates, is there anything landlords can do to push rates even lower? While some of the factors underlying these frequent moves are an unavoidable part of modern life, by shifting the tenant-landlord dynamic, property owners can establish lasting relationships with their tenants.
Identify major tensions
One of the most common reasons for frequent tenant turnover are disputes between landlords and tenants. Many of these are caused by poor communication, arguments over cleanliness or property damage, and, of course, outstanding rent or fines. Unsurprisingly, though, even these other arguments often come down to communication. Establishing a direct mode of contact can keep tenants in place and minimize periods of vacancy.
Create a continuation process
Frequent tenant turnover rarely happens because people want to move. Property prices aren’t going down and moving is expensive and time consuming. No, in many cases people move because no one encouraged them to stay or they don’t remember the terms of their lease. The experienced property managers at Green Residential are intimately familiar with this problem, which is why they encourage landlords to start the renewal process early. Talk to tenants about how much longer they have on their lease, what the renewal process entails, and consider offering incentives for them to stay. Rewarding loyalty is good business and can minimize periods of vacancy, saving landlords money.
Make the basics better
Common incentives landlords use to retain tenants include temporarily reduced rent, a voucher for a community service like a cleaning service or gym membership, or an offer to upgrade appliances, but these aren’t the only ways you can approach the problem. Bundling extras like internet or cable with the rent is another popular offer, and one that won’t significantly impact your bottom line as a landlord.
For tenants, though, this can be a major selling point. You might also ask about the other properties your tenants are looking at and how you can keep their business. It’s okay to give your tenants some bargaining power – it will make them feel valued.
And If they don’t stay?
Even with great communication and incentives, tenants won’t always stay. They may have had a change of financial circumstances, taken a job or educational opportunity elsewhere, or being moving to be closer to family. You can’t do anything about these changes, and that’s okay – but this is why starting the renewal process early is so important.
Starting early gives you time to seek out new tenants and minimize vacancies. List the property, arrange for showings, and speak to other tenants about whether they might know anyone they can refer. Bringing in friends of existing tenants can help foster community, and good landlords also offer referral bonuses to encourage this.
Private rentals are increasingly common in the UK, and they’re set to represent a quarter of households by the end of 2021. That’s a major shift for a country that was long split between ownership and council housing. The good news for landlords, though, is that this change has come with a call for greater tenant protections – such as three-year leases. That’s nearly twice the average tenancy period right now and landlords who lead this transition, and you can be one of those heading up the charge.