If you have a great tenant in place it might be advisable to forgo that annual rental increase or at least keep it to a minimum. Here’s why.
How much is a good tenant worth? Quite a bit actually and we are not only talking about someone who pays their rent on a regular basis, we are discussing something that often get overlooked – a tenant who looks after the home like his own.
An exemplary tenant will maintain the property to a high standard even if this means paying for certain things to be done out of his own pocket. Obviously, we are not talking about major maintenance issues here; that is and always will be for the landlord’s account. What we are referring to are the pesky little things that need to be attended to over time.
Gardens can become a major issue because this is one aspect that's often overlooked and left to go to wrack and ruin. Likewise, dirty exterior and interior walls that are never cleaned could end up costing a fortune to repaint every time a tenant moves on. The list is endless - damaged, stained carpets, broken light fittings and damaged kitchen fittings will all cost money to replace if neglected by a tenant. Landlords, of course, can choose not to rectify the damage, but the downside to this is the drop in rental income that will invariably occur. The other issue is the type of tenant that will be willing to rent a property that isn't in perfect nick. Broadly speaking, tenants will look after a well-maintained unit far better than a property that isn't in the best condition. A pristine home will also generally attract a better calibre of tenant and although there may be exceptions, this usually means one who pays their rent on time and who continues to maintain the home to an acceptable standard.
Good tenants are more prone to stay in the property for longer and quite frankly, there is nothing better than a stable tenant. So how should a landlord strive to keep a good tenant? For starters, don't insist on putting the rental up by excessive amounts every year, even if this means the rental is lower than other properties in the area. Rather weigh up how much the property is costing you the landlord, the overall condition of the property and as stated before, how well the tenant maintains the home. Tenants are human and won't stay in a home if they feel a landlord is taking advantage of them. Losing a good tenant often proves to be a costly exercise mainly because landlords run a serious risk of installing a ‘bad’ tenant into the premises every time the property gets leased out to a new person.
Bad tenants come in various forms. Those who skip paying or pay late every month, those who refuse to maintain the property and perhaps worst of all, those who believe that because they pay their rent every month this entitles them to insist that everything from changing of lightbulbs to keeping the garden tidy is the landlord’s responsibility.
It's not that difficult to keep a good tenant happy. As discussed, keep the rental increases reasonable and listen to his gripes and fix problems that he brings to your attention. The pros of keeping a good tenant far outweigh the cons because a tenant who feels that he is being respected and acknowledged for the way he looks after the home is far more likely to stay in the property for longer, which is ideal for all parties concerned.