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Discover the secrets of successful property management and investing on "The Property Investors Handbook" podcast. Join Colleen Sutherland as she shares expert insights and strategies for acquiring, managing, and maximising returns on real estate investments. Whether you're a beginner or seasoned investor, this podcast is your essential guide to navigating the world of property investment. Tune in and unlock the keys to financial success in real estate.
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Hello and welcome back to another episode of the Property Investor's Handbook. Today we're focused on one of the very key, I guess, most basic things about managing a property and that is tenant retention. It's a crucial aspect of the property management game and You know, so important in for so many reasons.
So, Colleen Sutherland is in the studio with us again to share her expert strategies on how to keep good tenants happy and engaged and in your property.
Colleen, welcome to the podcast.
Thanks Adam.
Okay, so you get a good tenant in, firstly how important is it to keep them there and keep that continuity rather than you know, having turnover?
It's, I think it's very vital, because you want to have that whole idea in your head. When you buy an investment property to have a good long term tenant, and a good tenant, what makes a good tenant is that not just paying the rent on time, but they've got to be able to look after the property and they've got to be able to, not just look after the property while they're living there, but to be reporting maintenance if it's needed and stuff like that.
So to have a good rapport with the tenant, it's the benchmark of how that tenancy is going to go.
Yep. And your investment at the end of the day.
Yes, that we've got somebody in there that is able to, look after the property that it minimises costs. Yep. Yep.
Yep. So they're, so the keys there is you've got them, they look after the property, it's always in good condition, they're, they're paying their rent on time and they're easy to deal with.
Yeah, they are, they have to be easy to deal with because when we select a tenant to present to the owner, it's got to be someone that we are confident that we're going to work well with them. Yep. Yep. Because one bad. egg they will take up a lot of time. And You, we
just try and avoid that. Absolutely. And you gotta remember, you know, thinking about this from an outside's point of view, you live this your business and what you've done for your, you know, most of your life.
But everyone needs roof over their head. You are gonna get applicants from people who aren't that mm-hmm . Who aren't the good ones. So I can see now you want to make sure you get that good one. Yes. And hold and hold onto them. And I guess the other key is too, that any turnover. That's costing money, isn't it?
It is. So when you're retaining a tenant, you don't just go, Oh, I don't want it vacant. You've got a way up. whether the tenant you have is the good tenant and good enough to retain. So when we're renewing leases, we will review their entire year of, and most tenancies are 12 months, we'll review their entire year of how they've been as a tenant.
Have they been overly reporting maintenance? Have they always been Are they often late in rent? Are their inspections ordinary? So if it's, yes, then it might be time to move them on and find another tenant. But if it's no, they're great tenants. Then they're the ones that you want to renew.
Sure. Okay. So what are some of the key strategies to retain? You find that good tenant. You know you want them to stay. They tick all the boxes. What are the key strategies in, keeping them there?
The main thing is if they report maintenance to do it in a timely manner. Yep Because you what you the tenant doesn't want is to have to ring us every week or two sure say that's still not fixed If they need something
done you get it get it
done quickly and then ask them, are they satisfied with the repair, to make sure that they are part of the decision making processes.
Sure. How about communication, that must play a role too, having the right level of communication. The right
level, yep.
Say that knowing that it probably, and I'm guessing is, some like a lot. Some don't like much at all.
Yes, there are some that like a lot. However, we have to still work within the guidelines of the processes, because if we're spending too much time, pandering to tenants, then they'll feel like they've got the upper hand.
Sure. But it's, yes, the right amount of, communication makes it, so much smoother. Sure. That they're aware of what's happening, what the timeline will be, especially when getting something fixed or getting something, say it was an air conditioner that was being installed and stuff. Yep. That they are aware of the process and, aren't left wondering.
Sure. Yep. Okay. Now here's a tricky one for you. Okay. Where do you weigh up rental increases at the end of it? You want to keep a tenant and, but you want to get the maximum rent that, you know, the market should demand for, one of your client's properties. How do you balance that? So where you think, well, I know that they may not be able to, you know, they may not be able to afford that.
How do you, how do you manage that scenario?
60 days before the end of the tenancy, we'll have done a rental appraisal, and we take that to the landlord first. And, because it is his property. Yep. So he gets the say. yup
we've done a rental appraisal and then there, it is, an option to increase the rent 50 to match what is currently being advertised.
Sure. That is the same or similar. Yep. To the property that has the tenant in there. We will first go to the landlord and say it, there is an increase of 50. However, if the tenant is currently It has the right to negotiate that and if they come back with something different like 30 or 40 It's something to consider for the landlord and we'll let them know is that you want to retain that tenant because they have been So good and so the tenant has the same information and we'll go and look to see if it's justified Yes, I'll stay, but I'll pay 40.
It's worth looking into that negotiation, to keep that tenant, to have no losses for the property being vacant.
Sure. Do you ever have a landlord take, I won't say significantly less, but less than they, they really, really need? I don't even want to say should but have decided they're willing to take less to keep a good tenant.
Yes. We do have those landlords and we actually just had that discussion with the landlord. The property was well below the market and I'm talking well below by like two hundred and something dollars. Wow. Below the market. And while they didn't need the money as in the mortgage, the rates and the insurance and all the other outgoings are going up.
But it also affects their insurance. Right. So that if it's not at market value or close there too, the insurance, also plays a little bit of a part in that. So you want to keep it close.
Yep.
To market value.
Okay, interesting. Did not realise that. How Have you got ways to measure your tenant satisfaction during the period of a lease?
They'll let you know. That's how we know.
They'll probably let you know if they're unhappy, more so. No,
they do let us know that was great. Thank you for getting that done quickly. Let us know what their other agent does, but yes, they, we do get a lot of compliments, but when a Tenant is not happy.
They will certainly let you know That they're not happy.
Sure, okay
And it could not be it could be that it's not in our scope of being able to make them happy.
Yep Yeah, yeah Look, you're in a tough game, you can't keep everyone happy all of the time. Can I flip this around and give you a hard question, Colin?
Yeah.
What if you've gotten the wrong tenants in and you want the opposite here, where you, let's just put it as, you don't want tenant retention.
If the tenant hasn't worked out as, we thought it was going to, so what happens is there's an opportunity for an agent not to give us the right tenants. the whole truth, at the start of the tenancy and then we find out during the tenancy and often it's, you know, a lot of maintenance.
They can't get away with the rent arrears thing because we have to get a ledger card, but a lot of it is a lot of maintenance. or they ring you for any little thing. Those people are the ones that we'll recommend to the owner not to renew their lease. Because every time the tenant comes to us, we go to the landlord and they're like, you're ringing me again?
Yeah. So, we only go to the landlord for their instructions on what they want us to do. Sure. So, yes, those ones will be weighed up. at the time of renewal and we will recommend to the landlord to move that tenant on and get a tenant that is the property suits a better tenant or a different tenant.
Absolutely. Well, look, I think we're just about out of time again. Thanks so much for coming in, Colleen, and talking to us about how to enhance tenant tenant retention, should I say, once again, great advice, some great insights. And, you know, that's why we do this podcast to let our listeners know, you know, the things that they do need to know, because you're the expert and you don't know what you don't know.
So, look for all the landlords and, other property managers out there. Remember a happy tenant is a staying tenant. And ultimately that is giving the best return to, To the investor. So for more guidance, check out Sutherland's Property Management Group online@spg.com au. That is spmg.com.au. You got it, I got it.
And, look, don't miss our next episode where we'll continue to delve into the essentials of looking after your property. So until next time, keep your tenants happy and keep your properties thriving and keep them in there as much as you can.
Thanks Adam.