Are all tenants created equal?
There are two main types of tenants:
- Heaven-sent tenants that will enjoy your home, take care of it and make the tenancy easy for you.
- Tenants from hell. They will make the tenancy a headache, forcing you to start a countdown to the end of their lease.
As a self-managing landlord, you are looking for the former on a long-term basis.
A long-term tenant is good for business.
You save time and resources associated with tenant turn-over every couple of months.
What Is Long-Term Tenancy?
Under the Residential Tenancies Act 1997, a long-term tenancy is any tenancy with a lease agreement of more than five years.
Any lease agreement of five years or less is a short-term tenancy.
A long-term lease makes it easy for you and your tenants to customise the terms. You can decide on things like modifications to the property and rent increases upfront.
Some of the items you should discuss before signing a long-term lease agreement include:
- Rent increases throughout the tenancy
- Exit terms should either of you decide to end the tenancy before the end date
- A schedule for home inspections
- A system for modifying the property when necessary
- A shared list of responsibilities for repair and maintenance (e.g., the tenant will fix anything they break and you’ll schedule maintenance on a regular basis)
Benefits of a Long-Term Tenant
A Tailored Agreement
Both you and your tenant can work to tailor an agreement that meets both your needs in the long-term.
Since you’re both in it for the long haul, you can edit some clauses to suit the tenancy.
You can set rental increase rates and dates for your tenant.
In the lease agreement, you can set dates and fixed amounts for the rent increases.
This guarantees you an incremental rental income for the duration of the tenancy. You can now plan your finances better.
You can invest in property modifications the tenant has requested.
You don’t have to worry about the costs. You are confident that the investment will pay off in the long-term.
A long-term tenant makes financial and logistical sense.
There are two ways for you to get one:
- Switch a tenant from a short-term lease. You and your tenant agree to end the current lease and sign a new long-term lease. Or, you can both decide to enter into a new long-term agreement at the end of an existing short-term lease.
- You and your tenant agree to enter into a long-term lease from the start. You both share your expectations and work on creating a lease to govern the long-term tenancy.
How Can You Inspire Long-Term Relationships with Tenants?
The first meeting between a landlord and a tenant can be nerve-wracking.
You need to communicate your business needs while showing your care for the tenant’s interests. Both of you are looking to build a healthy rental relationship.
A great attitude from you, the landlord, will attract and keep long-term tenants.
A long-term tenancy offers a myriad of benefits to both landlords and tenants.
Here are a few things you can do to inspire a long-term relationship with your tenants:
1. Be Flexible
Often, tenants looking for a long-term lease struggle with indecision. They’ll have several listings to consider before making a decision.
Don’t pressure a potential tenant to make a decision. Set the tone for a healthy long-term relationship. Discuss and agree on a compromise that suits both you and the tenants.
For example, if the long-term tenant is looking at other listings, give them a few more days to view the other properties.
A little compromise and flexibility will create a good impression. It will lay a healthy foundation for a long-term relationship with the tenant.
It will come in handy over the years when you or the tenant makes a request.
2. Create a Welcome Package
Use your knowledge of the neighbourhood to make potential tenants feel like they’re walking into a house they can turn into a home.
During your meeting, your tenant looks for the ‘X-factor’ that will make them fall in love, so establish yourself as an authority on the neighbourhood.
For example, if you’re meeting with a couple looking for a family home, offer a list of child-friendly restaurants in the area they can visit. The extra information will address a genuine family concern that shows your interest in their needs.
Such a little bit of information can make a difference in helping you land a long-term tenant.
After they move in, consider a welcome gift package that includes:
- A personalised welcome card with your contact information
- A list of tradies and service providers you know and trust
- A bag of locally sold coffee beans
- A gift card to a spot popular with the locals
3. Pay Attention to the Details
Neglecting your property can drive a wedge between you and your tenants.
You need to show your tenants you care about their comfort.
Start with regular maintenance and respond to repair requests fast.
Pay attention to challenges your tenant might be facing and work on addressing them before the tenant brings them up.
For example, if a tenant informs you that they intend to host a Christmas party, switch up the maintenance schedule. Do the external painting and landscaping in late November or early December.
A simple gesture such as rescheduling a paint job will keep you in the tenant’s good books. It will earn you their loyalty in the run.
Increase your cashflow by self-managing your property.
4. Keep the Property Secure
Today’s technology gives you a broad selection of security equipment to keep your property secure.
Invest in the best surveillance equipment and locks to keep your tenants safe.
Tenants will remain loyal to a landlord who respects their security.
If you upgrade the security equipment on the property, brief your tenants on the new protocol and procedures.
You can do this via email or create personalised notes you can hand deliver to each tenant.
5. Respect Tenants’ Privacy
A long-term tenancy means you’ll have to inspect the property regularly.
If you’re planning to access the tenant’s unit for inspection or maintenance, schedule the visit at a date and time convenient for the tenant.
Never enter the tenant’s unit without warning unless it is an emergency.
Work on your communication skills. Invest in regular communication. It’ll help you build your relationship with your tenants and earn their trust.
Make sure you discuss any issues that affect their privacy. Maintaining a regular back and forth on such issues will help you earn their trust.
Building a Long-Term Rental Relationship
Your attitude at the start or during a tenancy can help convince tenants to sign a long-term lease.
You need to start off by showing a potential tenant that you respect their needs as much as you respect your property.
Once you find the right tenant, you need to work on building a relationship that will convince them that a long-term tenancy is the right option.
Communication can make or break the relationship you are building with the tenant.
A platform such as Lodge makes it easy for you to streamline and automate most of your communication.
Lodge leaves you with enough time for you to focus on the small acts. These acts will help you build and sustain a healthy relationship with your tenant.
You can start streamlining the communication with your long-term tenant today by signing up to Lodge’s free property management software.