Real Estate 3-Steps To Increase Tenant Retention & Optimize Rental Income
“We are what we repeatedly do. Excellence, therefore, is not an act, but a habit.” ~ Alcmeovque Gide
When you manage or own commercial real estate, one of the things which may get overlooked is how to get tenants to want to stay in your property.
Many owners bemoan the fact that their properties are not as profitable as they would like, and believe that a tenant’s decision to move out is guaranteed. They sit on the fence, hoping that a tenant will take one more month or two more before moving. If you are like many owners like this, you are simply paying yourself a mortgage while you foot the repair bill.
The problem is that many property owners do not take a look at their bottom line. What they overlook are the good things about their property. If you are reading this, perhaps you realize that you could be losing hard-earned cash by making sure your property is occupied the entire time you have it vacant.
When the commercial real estate market appears to be in a downward spiral, many are inclined to look for any bottom that may exist. And often, owners will try to find tenants who will pay their mortgage while they pocket the rental profits!
So how does one get tenants to want to stay in their commercial real estate for the long term? Here are 3 tips that may help:
1: Look to Your Tenants for M otivation
Tenants know that a commercial real estate owner has to do something to get a tenant to stay in a property.
The problem is that many property owners do nothing in order to form a strong tenant retention strategy. So to avoid this it is important to look at your tenants’ psyche. Tenants are very smart when it comes to business. They are usually intelligent in planning their own success and will strategize to their benefit. But the real key to commercial property management, and the key towards a strong tenant retention strategy, is to look at the tenants’ psychological needs.
A big mistake that many commercial real estate owners make is to focus just on the physical buildings, the polished interior, the well-appointed fixtures, and all other assets of the property. But then they don’t look to why the tenants are there. We often ignore the psychological needs of tenants when it comes to tenant retention.
A well-padlocked and locked car may seem to be a security measure for the owner. However, tenants see it as more of a nuisance to keep this car in the parking lot even if it doesn’t work. If you notice that many tenants either park on the street or in the lot and then go to work or shop without ever looking at the car, you can bet that they are not very happy with the property.
A majority of tenants find it very annoying when they have to walk up one of these ramps to get to their assigned space. The fact is that tenants would much prefer to have a faster walk-up ramp to their assigned space. When you can give tenants an option of faster access you will have many more long-term tenants. Of course, you will need a security guard or had responsible tenants who know exactly where the ramp is and how to use the ramp. When tenants feel safe they will more often remember your property and will renew lease after lease or buy further space from you in the future.
2: Understand the Landlord’s Landlord Tendencies
Every successful commercial real estate owner should look deeper into his or her landlord strategy. There are often underlying factors that are not obvious to the commercial real estate owner. If you discover these factors and learn how to fix them, you may see an even stronger tenant retention effort.
You may look at a property and think that the tenants are happy and it is a joy to own. You may be so in love with the building that its beautiful exterior makes you forget all about the inside.
And again, as a commercial real estate owner, you may be so focused on how beautiful the inside of the building is that you forget all about the other spots that need work and even painting them.
What this means is that you must actually look into the landlord’s mind. What does he or she think about your property? Ask yourself if it is the right building for the tenants. If so, then you want the tenants to be happy in your property. That is your main goal.
3: Make a Specialist
If you are a commercial real estate owner or manager and you don’t have any idea where to begin looking for those tenants, then at least look into what other firms or groups your local community has available. Often there are businesses looking to expand. Perhaps they are poised for a growth spurt. Make their needs a priority and work with them to develop a tenant retention strategy.