4 min read
How to Beat the Average Apartment Turnover Rate in New York
David Schwartz Oct 25, 2016 9:00:00 AM
It happens all the time.
You’ve finally filled your multi-family home to max capacity and now a tenant is moving out.
There are a lot of reasons they may be moving. They could need a bigger layout or have a change in their budget. They may be unhappy with your apartment or they could just want a change of scenery.
While you may not always be responsible for their decision to move out, the cost of them moving can hurt. Luckily, there are ways you can reduce the rate of tenant turnover.
Understanding Tenant Turnover
It’s no surprise that losing a tenant costs money, but it comes down to more than the rent you’re missing out on.
The cost of an unleased apartment can run you anywhere from $1,500 to $5,000 when you include maintenance, marketing, and any incentives to get a tenant in faster.
The average tenant turnover rate in the United States was 54% in 2014. That means every year, half of all tenants moved out.
These numbers claim that residents average a 2-year occupancy per apartment.
Unless you’re interested in losing up to $5,000 per apartment every 2 years, it’s time to look at your options. While there are ways to save money with the process, these techniques can help you reduce the turnover rate and avoid the problem altogether.
1. Interview Applicants
Conducting interviews is a long process. You’re looking at their public financial information, criminal background, and housing history, all to make sure they’re the right tenant for your unit.
Part of that check should also verify that they’re in it for the haul.
It’s a tedious task and time-consuming, but identifying renters who will stabilize one of your units can save you a lot of money.
Consider hiring a tenant screener to help you find the best match. For a fee, they’ll collect all of the required information and send you a report with how well the applicant rates against your standards.
While it may cost a bit have this information collected, it’s significantly less than the cost of losing an apartment for a month. Find the screener that’s right for you and let them find tenants with longevity.
2. Create a Better Experience
One reason why tenants leave is because the setting isn’t for them. They’re looking for better amenities, lower rent, or a new location.
While you may not be able to move your building, you can make changes to the two former options and create a unit they’re excited to live in.
For amenities, there are plenty of choices, including things like Parcel Pending lockers, a concierge, and community workstations. Your options are limited only by your budget and creativity.
Lowering rent can be extremely beneficial, but not if it costs more over the year than losing a month’s income from a unit. This requires a real weighing of options to decide if you can manage it. Identify what the market value for your unit is and keep enough rent that you’re profiting.
If you need some ideas, look at these ways you can increase the market value of your property.
3. Maintain a Clean Property
No one wants to live in a dump unless they’re paying rent for that specific feature.
Custodians and groundskeepers can help keep your property looking clean and can be hired or contracted out. There are benefits to both depending on what you require, but either way, you can have a building that tenants aren’t repulsed by.
Offer easy recycling throughout your building to show tenants that you’re conscientious of our impact on nature and that they can be, too. If you’re not, then it at least gives your tenants a good place to dispose of their waste.
4. Make Prompt Repairs
If your building is in shambles and no work is being done, tenants will become restless while waiting and assume their best interests aren’t being considered.
It’s up to you to find quality maintenance crews who can keep the property well taken care of.
In order for that to work, you need to conduct regular inspections of all public areas. Take notes of anything that’s broken and get a crew in to fix it.
You also need a method for residents to report problems. Seeing something fixed, especially if they reported it, will fill your tenants with confidence that you’re taking care of their concerns. Make sure all tenants have your email address or phone number to file their reports.
5. Constantly Make Improvements
While repairs are important, a great way to keep tenants happy is to make improvements. Seeing that their rent check is being reinvested into the property will increase the odds of them staying.
There are hundreds of amenities you could consider adding or improvements that can be made to current amenities. The goal is to be actively bettering your property, increasing its value and your residents' satisfaction.
6. Get Advanced Notice
If your tenant does need to leave, ensure your lease works to help you fill the unit. Include a timeline that tenants are required to follow in order to be cleared from the property. Select whatever minimum time you’ll require for notice, but be sure it’s far enough out that you can schedule maintenance crews to take care of the property.
If the problem is something you can fix, offer to do it. You may be able to maintain the resident because of an issue you didn't know existed. If you or the property manager is approachable and welcoming, the odds of your tenants sharing the news that they’ll be moving out will come easier.
Don’t become upset if they stick to leaving, but rather show support. Your demeanor can lead to happier tenants, meaning better reviews and perception to the public.
7. Complete Inspections Prior to Vacancy
As another addition to your lease, make it clear that you’ll be conducting inspections before they officially move out. This gives you the ability to make preparations for maintenance without wasted time with an empty unit.
Take pictures before residents move in and provide them with copies when they give you their notice. If the problems are minor, they may be able to fix them before leaving so that they’re not charged, saving you time and paperwork.
8. Get Feedback
While tenants may not want to fill out a questionnaire as they’re on their way out, asking why they’re moving can give you insight into problems you didn’t know existed.
Acting on that information can save you from losing other tenants. Take notes and keep a running log that you can reflect upon throughout the year. A little bit of knowledge can go a long way with your budget.
Winning the Fight
There are ways you can slow tenant turnover, but it’s going to happen eventually. Staying prepared and paying attention to what your residents need can help mitigate these costs.
Check what tenant turnover can cost you with this tool and figure out how you can use these tips to keep your units filled.