In considering options for how to retain tenants, most landlords could do well to look at how they increase their rental rates. When rental cost outpaces wages, tenants will often have no choice but to seek out more affordable living options. By reducing or eliminating rental increases, landlords can almost entirely remove the risk that residents will seek out new accommodations.
Of course, landlords can’t eliminate increases without making up the cost somewhere else. However, by looking to new sources of revenue or offering better value for the cost, tenants will likely be more amenable to staying on the premises. Multifamily community upgrades can provide innovative streams of funds while ensuring tenant satisfaction.
How to Retain Tenants: Work Around Rent Increases
Anything that allows tenants to entertain outside their room without actually leaving the community can be a good option for driving revenue without increasing rent too much. Here are a few options which will also work as resident retention strategies.
If a landlord has the space in their community, offering an on-site coffee shop can be a great way to please tenants and gain additional income. Revenue from the overall coffee market is likely to reach more than $86 million by the end of 2020. By offering an on-site coffee shop with seating and free wi-fi, landlords can take advantage of that demand.
Bowling is the most popular game sport in the US, but the number of traditional bowling alleys is declining at a rapid pace. There are currently only about 4,100 commercial bowling centers in the US, and much of the decline comes from the reduced number of leagues and tournaments. This could be good news for landlords as demand for casual bowling opportunities remains high and there’s less commercial competition. Putting in a simple bowling alley with a few lanes and snack services can be an excellent way to increase tenant interest and drive revenue.
Most communities have clubhouses, and most are underused. Landlords should consider how they can put these facilities to good use by setting up after-work happy hours and parties for tenants. This is much more convenient for residents who don’t want to worry about transportation when they choose to imbibe and creates an excellent opportunity to build a community and get tenants acquainted. Such a strategy provides a different avenue for how to retain tenants as it creates close connections that make them want to stay.
A gym membership can cost up to $700 a year when considering all the fees. Many tenants choose to keep their gym memberships—even when they have free facilities on site—because their complex’s facility doesn’t offer the fitness classes they want to attend. Landlords can take a small portion of that revenue by offering these classes. This doesn’t even have to be an expensive endeavor. Many fitness experts will offer classes on a split revenue basis, where they take a portion of earnings and allow the community to keep the rest in exchange for free access to their facilities and tenant base. Landlords should survey their complex’s regular gym users to gauge interest in such a program.
Judiciously Increasing Rent for California Residents
California’s Tenant Protection Act of 2019 restricts how much landlords can increase rent on their tenants. Most landlords with good policies for rental increases were able to avoid any significant business disruption as they were already acting within the law. Under new state laws, rental increases are capped at a maximum of about 5% in areas where there are no local rental ordinances.
Landlords who already had good policies in place likely never exceeded that anyway, as it keeps up with the cost of living and ensures that tenants aren’t surprised by massive new costs. Ideally, the cost-of-living change from year-to-year should serve as the benchmark for any type of rental increases.
When looking at options in how to retain tenants, the landlord must consider the importance of rental costs and increases. By keeping pace with the cost of living and offering additional opportunities to drive revenue, landlords can cultivate satisfied residents who stay on the premises. Value-add amenities can provide additional revenue streams and increase tenant satisfaction.