Achieving strong tenant retention rates is a goal on every property manager’s list.

Sadly there is no golden answer on how to convince your tenants to stay with you – but there are proven strategies that you can start to implement.

Why is tenant retention important?

Any business development site will tell you that it’s five times cheaper to keep clients than it is to generate new ones, and this same concept applies to residential property owners/managers and their tenants.

By building a tenant retention plan, you can decrease your cost per acquisition, build a consistent income, and continue to scale your revenue, risk-free.

Calculating your tenant retention rate

Tenant retention rates are calculated much the same way as any user rate.

1. First, total how many tenants you have at the start of a period.
2. Second, total how many tenants you have at the end of a period.
3. Divide the second number by the first.
4. Multiply this by 100 to get your % tenant retention rate.

For example, if you had 120 tenants at the start of June, and 110 tenants at the end of June, you’d do (110/120) = 0.92.

Then, when you multiply this by 100, you’d discover you have a 92% tenant retention rate for that month, which you can compare with the year previous.

Additionally, to gain extra insight into which properties are a good investment, you can calculate average tenant retention for each individual apartment block, retail site, or office building you manage over a period of time that makes sense to you.

What is a good tenant retention rate?

For residential properties, you should aim to retain 60% of your tenants (slightly above the national average of 48%).

This means, out of the 120 tenants you had in June last year, you’d still have 72 of the same individuals renting the same property.

For retail/commercial properties, you want to aim a little higher. A retail tenant retention rate should be around 70%, as businesses tend to stay in one place for significantly longer than residents. However, if they are growing successfully, they’ll eventually save a deposit for their own space and move on.

How to retain your tenants: 8 proven strategies

It’s idealistic to assume that all your tenants will stay with you. In general, residential clients leave because they:

• want a better or bigger home
• are relocating for a job
• found a cheaper price elsewhere.
• moved to be with family
• have saved enough to purchase a property.

This sometimes means that retaining tenants is completely out of your control. You need to focus on what you can influence, rather than what you can’t.

1. Incentivize lease renewals

When you are rapidly approaching a lease renewal period, you need to consider how you can convince your tenants to stay with you. This may include offering rental discounts upon a successful renewal or even agreeing to previous requests they have made (such as permission to have a pet).
No matter what, provide them with a reason to stay, and you’ll be positioning yourself for a lower tenant turnover.

2. Be responsive and maintain good communication

In today’s digital world, we can assume that tenants are best friends with technology. This means they’ll be expecting almost-instant communication and will want to be able to reach you either by phone, email, your website, and social media.

3. Keep rental rates fair and consistent

It can be tempting to increase and decrease prices according to the market.

However, you can improve your tenant retention rates by charging a consistent price. This way, clients can budget accurately and will be more willing to stay at your property.

4. Prioritize maintenance

It’s impossible for a tenant to feel safe and secure when the building they are renting is falling apart around them. Standard maintenance should always be a priority on your to-do list, and not an afterthought.

5. Be flexible with good tenants

Tenants who have proven themselves as reliable individuals should be granted a little bit of leeway every now and then.

For example, you could:

1. Allow them to paint the walls (as long as they repaint when they leave).
2. Make exceptions for late fees caused by ill health or personal circumstances.

By being an understanding property manager, you are more likely to retain tenants.

6. Take tenant feedback seriously

Admit it. As humans, we’re bound to make mistakes.

When your tenants are complaining, or, at the very least, providing feedback, be sure to listen, take their advice to heart, and try to do better.

They might be upset that you accidentally booked a fire alarm drill for seven am on a Sunday morning, for example, rather than the usual Monday. When this happens, be proactive with taking responsibility for what has happened and apologize.

7. Pre-screen all tenants

Tenant retention isn’t simply about being the best property manager you can be. It’s also about choosing the right tenants and making sure they have decent intentions.

Look at their credit score and address history, and ask them how long they want to rent your property. If you keep onboarding tenants who only want to stay for six months, this is one quarter of the national average, significantly impacting your tenant retention rate.

8. Facilitate community building

The Wall Street Journal interviewed successful apartment owners on social media; these owners believe that tenants who make friends are more likely to stick around for another lease term or two. This idea of friend and community building is a key aspect for property owners and managers to retain tenants.

How to retain tenants

Retaining tenants ultimately comes down to their experiences and how you treat them.

Whether you run commercial or residential properties, it’s likely each person spends significant portions of their day in the unit they rent. When they don’t feel supported when things go wrong, or they don’t believe you have their best interests at heart, they aren’t going to renew their lease.

Tenant retention rate – FAQs

Tenant retention isn’t an easy concept to wrap your head around. Here are some FAQs to help you understand.

What is the average retention rate for a tenant?

The average tenant will stay in a property for around 25 months (or, just over two years). This brings the average tenant retention rate to around 50%.

What is a tenant retention rate?

Tenant retention refers to the sum of how many tenants stay with you over a period of time, for example, June 2021 to June 2022.

How do I get rid of a bad tenant?

Evicting tenants is never an easy process. You can consider raising the rent so they’ll leave naturally, pressing charges for damages, or simply asking them to leave. Typically, if they reach the end of their lease, you can then start an eviction through the courts.

How do I increase my commercial tenant retention rate?

Commercial tenant retention is a little tricky. The main cause of them moving to a new property is because they need a bigger unit or have gone out of business. Listen to their concerns, and consider offering cheaper alternatives if needed. For other ideas, read our blog on commercial tenant retention.

How can I communicate with residential tenants?

It’s important to put a system in place for property managers and tenants to efficiently communicate with each other, otherwise information can get lost and requests go unfulfilled. Residential properties that use tenant communication software can easily manage all interactions with new leads and residents through different contact methods – phone, email, text, web chat, and more.

How can I automate the lease renewal process?

Offering a quick and easy way for residential tenants to renew their lease can increase tenant satisfaction, improve retention rates, and streamline the property management lease renewal process. Electronic signature and storage tools that keep all your lease documents organized and secure can simplify the renewal process for residents and property managers.

Retain tenants with MRI’s property management software

Looking for ways to boost your tenant retention rates?

Our property management software has an intuitive Tenant Connect client dashboard that allows tenants to easily file maintenance requests and renew their lease when the time comes.

It’s an easy-to-use platform designed to foster strong relationships between yourself and your clients.
Trial our services today.

Purchasing investment properties can be a risky venture when you don’t have all the information to hand. Details can be missed, and you could end up buying a building that’s more trouble than it’s worth – with high delays in rent payments and the frequent, costly maintenance required to avoid tenants suing for safety issues.

A property’s rent roll is meant to counteract blind decision making when you are looking for profitable investments and has been used in real estate for years.

What Is a Rent Roll?

A rent roll by definition is a management tool that details properties, displaying legally required lease information and helping landlords track start and end dates of contracts, rental income by property, and even annual increases. A property’s rent roll can also help building owners/overseers process and track recurring issues.

What Is the Purpose of a Rent Roll?

Rental properties are increasing four times faster than incomes. With so many real estate companies handling multiple buildings, they needed a quick and easy way to review data.

When rent rolls were first developed, the system was a revolutionary concept that reduced the element of risk in purchasing properties.

A rent roll keeps vital property information in one place, aiding future sales to interested real estate buyers.

How to Predict Rent Roll Commercial Real Estate

Rent rolls aren’t just incredibly useful for property managers, they are also important in real estate. If you’re wondering how, then know this: it helps you calculate good and bad investments.

Say, for example, you wanted to buy a building that consisted of multiple commercial offices for hire. A rent roll report would allow you to delve into the information available to you – such as when each office has been rented, how long for, and any current occupiers who are leasing space in the property that would likely continue renting from you.

How Does a Rent Roll Work?

Still wondering what a rent roll is and how they work? Rent rolls can be produced in a variety of software applications, including manually inputting data into Excel, or utilizing software that does part of the work for you. This collaboration of data allows for easy perusal and informed judgements.

Who Uses Rent Rolls?

Rent rolls are mostly used by property managers, landlords, and real estate investment companies.

They can be bought and sold on the private market to give insight into rental incomes in the area and help buyers judge the quality of a building. Well-maintained older buildings with clear service history listed in rent rolls may still be worth purchasing due to the aesthetic priorities of
today’s renters.

How is a Rent Roll Useful to a Property Manager?

Rent rolls compile the information required to efficiently maintain and look after multiple properties so that important details don’t get missed. Rent rolls were designed with a specific purpose in mind: enhancing the quality of services for tenants and landlords directly affected by the manager’s actions.

How to Create a Rent Roll

Now you understand the definition of a rent roll, it’s time to learn how to make one. A detailed rent roll report would include:

1. Identifiers: Rent rolls should detail address and contact information first and foremost, as “identifiers” for each property. They could then list details about the area, including average incomes and average property prices.
2. Unit Information: If the rent rolls are covering a unit, then it’s only useful to a property manager on a regular basis if it details important information about how many flats or offices there are and how much work there is to be done.
3. Individual Properties: Each individual division should have its own subcategory that lists the number of doors and windows, square footage, bedrooms, bathrooms and other facilities.
4. Tenant Details: Contractual lease agreements should be tracked at all times, and are an important part of an overall rent roll definition. Any agreements made (such as the rent due date and security deposit information) should be added here, including annual increases according to the rent value of your property.
5. Rental Income: An annual total rental income will be displayed at the end of a property’s rent roll report.

Altogether, therefore, a rent roll gives a great overview of costs and income – much like any balance sheet – with just a few more details.

It helps property managers stay on top of their workload and calculate the disposable income they have to spend. Rent rolls can work in tandem with a property management software to manage complex priorities and make data-backed decisions.

Rent Roll Checklist for Property Managers

A major cause of burnout among property managers is the bad business that gets carelessly brought into the rent roll for the sake of growth. A big list where nobody pays their debts isn’t worth compromising a smaller but consistent income that allows you to budget accordingly.
When determining how a rent roll is useful to a property manager, we need to take a look at the management properties which are actually worth adding to your overall portfolio. Often, it’s what you say “no” to that will allow your rent roll to succeed.

We interviewed Darren Hunter from Inspired Growth Training, who shared some tips to help you avoid making wrongful decisions and instead grow a profitable property’s rent roll.

1. Annual Contract Value

As a fee maximizer, Darren believes in taking to account your expertise and proven track record when determining your fees and remaining firm in negotiations. If you must give discounts, set an acceptable range that isn’t compromising your needs. “You can’t just be breaking even,” says Darren. How an owner negotiates fees with you is often a tell-tale sign of the quality of the management and the likely future of a property’s rent roll. Difficult owners in most cases are often difficult due to money, according to Darren, whilst owners who share the same values as you (i.e. the type of owners you want) will be more reasonable and will appreciate the true value of managing quality properties.

2. Rent

A rent roll report should list the potential income someone could gain from a property.

“Be wary of low rent properties,” says Darren. According to him, low rent usually means lower property management fees and attracts low-end tenants – both of which you do not want if you are aiming for a profitable earning portfolio. Determine an acceptable price range for rent and avoid going below this benchmark.

3. Location and Distance

As they say in real estate: location, location, location!

Ideally, you would want to avoid suburbs and streets that have notoriously high crime rates. It also depends on the distance they cover and the detail you go into. Longer distances mean higher costs due to the time and expenses required to travel and service the properties. Always keep in mind that a substantial percentage of your rent roll should be located near you.

4. Extreme Landlords

A professional and amicable customer relationship is one of the pillars of a high-quality rent roll.
A property management software can help you achieve this, but equally important is assessing the character of a landlord before bringing them into your business. Be aware of any extreme behavior of owners in relation to financial and emotional motives. These may include:

1. Unreasonable expectations regarding tenancy laws, repairs, wear/tear, etc.
2. Not wanting to spend money on repairs.
3. Requiring cheap fees.
4. Poor quality property.
5. Requires rent levels that are unrealistic.
6. Unreasonable tenant expectations and criteria.

5. Quality of Property

Be wary of buildings in less than reasonable cleanliness, quality and maintenance condition. This will all be clear in a property’s rent roll report. Newer homes don’t usually translate to lower maintenance costs and older structures don’t necessarily mean poor quality. It’s important to always be objective when checking out a property and not be fooled by that fresh coat of paint.

6. Property Structure

To build a high-quality rent roll, you also have to be discriminating in the style and structure of the property to be managed. This usually ties in with the low rent criterion discussed earlier. From Darren’s experience, a profitable rent roll usually doesn’t include older flats and units unless they are in good shape and exceed your desired rent level. In such cases, Darren suggests increasing your property management fees to maximize your income from low-cost housing.

Don’t forget to track and cross-check every detail in a property’s rent roll.

7. Furniture

Furnished properties often require management consent due to complications associated, like wear and tear issues. Ideally, you would not want to manage partly or fully furnished long term rental properties, unless it caters to high-ended executive types.

A useful rent roll starts with keeping a critical eye on the new management you bring into the business.

By setting benchmarks, you can determine the right owners, properties, or tenants that will help you grow an ideal rent roll in real estate – one that everyone can be proud of working in.

Applications to Help Property Management

One document alone isn’t enough to aid property managers and investors decide how to predict changes to rent roll commercial real estate and calculate when action is needed.

MRI offers a range of real estate software to transform the way communities live, work and play. You can manage rental properties, finance, assets, and more.

Reach out if you have more questions like “What is a rent roll?”, or better yet, take a look at what we can do with our no-obligation, free demonstration. Contact us today.

Facilities Management is a profession that refers to the integration of physical infrastructures (like technology) and the employees who maintain the safety, security, and efficiency of these systems.

The term was first coined 60 years ago, and, since then, the global facility management market has grown to a value of $1,239.99 billion in 2021 and is even expected to increase a CAGR of 5.7% this 2022.

What Does A Facility Manager Do?

Facilities Managers are “considered strategic executives who are integral to an organization’s ongoing success.” They are responsible for the maintenance of “places of work” (such as offices, retail stores, and warehouses) and ensuring the proper function of business operations.

Institutes of higher learning now offer advanced facility management degrees, and the position has evolved from a “handyman” position into a sophisticated professional management discipline that involves initiative, forethought, and planning.

Not to be confused with property management, facilities management descriptions focus less on the buildings themselves and more on the processes and people required to ensure safety and security. For example, they might organize fire alarm checks on a regular basis and communicate with electricians when needed.

Responsibilities of Facility Managers

In simple terms, building and facilities management is the efficient coordination of all activities related to keeping physical spaces and infrastructures operational; from single buildings to complex campuses used for a range of revenue-generating sites, like retail, manufacturing, and healthcare.

The management of facilities includes making sure each element of a working environment is safe simply by meeting relevant regulatory mandates, conducting frequent maintenance, and reorganizing structural layouts.

This should all be done in a way that promotes productivity and the well-being of every user.

The Role and Job of a Facility Manager

To truly get to the bottom of what facilities management is, let’s explore the two categories of their day-to-day jobs: hard services and soft services.

Hard Services

Hard services are related to physical structures (the parts that can’t easily be removed). Corporate facilities management is sometimes required by law to ensure the health and safety of workers or occupants:

• building maintenance
• maintenance of HVAC systems
• energy and water management
• elevators and escalators
• lighting
• fire safety
• plumbing and drainage

The role of facilities management, in this case, is to reduce the risk of accidents and disasters, which could then result in hefty insurance costs. Facilities management software is a great option for companies who need to stay up-to-date with repairs.

Soft Services

Soft services are related to keeping the workplace comfortable and secure.

Some of these facility management task descriptions are not absolutely necessary and can be added or removed after quality and budget reviews:

• housekeeping and custodial services
• security measures
• parking lot maintenance
• pest control
• waste disposal
• recycling
• replenishing furniture and equipment
• information systems
• document management
• mail management
• space management
• grounds maintenance and landscaping

The functions of facilities management are often favored by employees to make their lives easier. To prioritize these soft services accordingly, companies can get an overview of their costs through our integrated workplace management system solutions.

Overall, the job role promises a dynamic, challenging, and engaging career for every individual.

What Skill Sets Do Facility Managers Have?

Although Facilities Managers can expect to wear a variety of “proverbial hats”, there are some common skill sets all facility managers require (according to facility management news reporters):

• Willingness to Learn
• Digital Competency
• Problem-Solving
• Timekeeping
• Personability
• Budgeting/Finance
• Emergency Planning
• Innovation
• Leadership
• Environmental Stewardship

Case Study: Real Estate Facilities Management

A real estate facility manager has lots to pay attention to.

Not only is the industry fast-moving and constantly changing, but there are many minute details that go into selling and investing in houses.
Digital competency, for them, is arguably the most important part of their job – allowing them to reallocate time-consuming tasks from their to-do list.

Property management software would also let facilities managers meet the extensive demands of their sector in an accurate, timely manner.

What is the Future of the Facility Management Industry?

Like almost every industry on the planet, smart technology has accelerated the field of facilities management.

To stay competitive in today’s marketplace, facilities management – whether it is handled internally or outsourced – needs to include a computerized maintenance management system (CMMS) complete with a mobile application.

Cloud-based automated solutions reduce the hours of wasted time spent on manual processes and eliminate downtime that results from human error.

A CMMS can revolutionize work order processes, preventative and predictive maintenance tasks, and the management of assets, vendors and inventory.

Facility management service providers will already be using these tools, and companies desiring smooth-running business operations should consider management software through MRI.

Technology & Facilities Management Companies

To this day, many smaller organizations may prefer to conduct management of facilities internally.

Even so, there are thousands of options for facility management services out there and businesses of all sizes have been growing the facilities maintenance industry – simply by outsourcing a task or two.

The burgeoning trend in the industry is to offer bundled building and facilities management. This comprehensive scope of services adds value and drives better quality. The top 10 integrated facilities management companies offer:

• Leadership
• Meeting room services
• Business risk assessments
• Catering services
• Business continuity planning
• Management of vehicle fleets
• Contract procurement
• Front-desk services
• Management of utilities
• Emergency response

In addition to freeing their own personnel to focus on goals more closely aligned with their core business, companies purchasing facility management services benefit in several measurable ways.

1. Improved Efficiencies: A single point of contact eliminates duplicate functions, streamlines communication, and enhances workflow processes.
2. Higher Productivity: Facilities management descriptions include maintenance strategies to prevent breakdowns that often bring production to a halt.
3. Increased Expertise: The role of facilities management employees is to already have the technical know-how, saving companies from expending unnecessary time and resources on training in-house.
4. Reduced Costs: In addition to spending less time on training, companies save on staffing, employee benefit, payroll expenses, inventory, and more.
5. Better Quality Control: With proven systems already in place, facility management services produce consistency and reliability.

How Important is Facilities Management?

Facilities management has become a critical factor in a company’s growth.

According to Gartner, “providing a workspace to an individual employee costs an organization from $8,000 to $14,000 per year.”

Proper maintenance of these spaces can help businesses avoid sudden and expensive costs – and through FM technology, businesses can save a 5% reduction in the total cost of occupancy.

From looking after equipment to creating an environment that supports the company culture, facilities management adds value on a daily basis and for the long term.

High-performing businesses understand the necessity of prioritizing building facilities management. This aspect of their operations and expect facilities management companies to offer solutions based on cutting-edge technological trends.
If you’re not already using an automated solution to manage your facilities, work orders, maintenance, assets, and more… it’s a good place to start.

Here at MRI, we offer intuitive and flexible software solutions to help you transform your organization.
Reach out if you have questions, or better yet, take a look at what we can do with our no-obligation, free demonstration. Contact us today.