This kind of came to me out of the blue this past weekend. I had a prospective tenant contact me on Saturday afternoon and ask, “Hey do you have any rental properties available. I am looking for a home.”
And I did not have anything available. But I asked how they found me and they said they were talking to one of my tenants and they recommended they call me.
I frequently answer these calls and frequently respond that I have nothing available.
Why are these people calling me without me doing anything proactive to advertise my properties?
Why do I always have to tell them I have nothing available?
In my 15 years as a landlord, this has been much more common than I realized. Gosh, I have never really done any advertising with my rental properties outside of maybe putting a sign in the yard.
I have never done Craig’s list ad, a newspaper ad or any tangible, deliberate marketing of a rental property other than a yard sign at most. Yet I continue to keep my portfolio occupied. I mention this not to brag, but to share a learning.
I don’t advertise, yet my phone is ringing off the hook. I realized what is at the root of it.
At the root of our business we focus on taking care of our tenants, and that ultimately provides benefits to our business. We take care of our tenants much like a company takes care of its employees. I am a past corporate guy. That was my story prior to becoming a real estate investor.
As a corporate guy, our focus was to take care of our employees. They were our best assets and they were one of the best resources for new employees. When we took care of employees and provided a great place to work and a great work environment with rewards and benefits and challenges, they would bring us great talented employees to come work for us. We rarely had to market for employees then either, it was pretty much word of mouth. The old adage applied, “It’s not what you know, but who you know.” It applied very much in that corporate scenario.
Lessons transferred from corporate life to landlord life and rental occupancy
That has transferred from my corporate life to my new life as a real estate investor and landlord.
We treat our tenants like employees. They are incredibly valuable assets. They work more than one-third of their work month purely to pay our principal loan, interest, taxes and insurance on these properties.
So we treat them very well. And the outcome of doing that – treating them with respect, providing them with safe, quality living environments is that they are the ones keeping my properties full.
We are doing internal marketing to our tenants and they are becoming our marketing force.
They have created a backlog of their friends, family, acquaintances and co-workers who they like and respect, and they in turn, have provided them to us as future tenants.
As you look down this waiting list, the source is all from our tenants. Our tenants do an incredible job of screening for us, much like employees in the corporate world. They are not going to attach their name to any prospective tenant they think will become a problem tenant. They do not pass on names that are going to come back and reflect poorly on them if we were to lease to them.
They tend to screen at least as rigorously as we do. Or at least pre-screen much more rigorously than we do, before we do our formal screening. They bring us tenants who will be successful with us, that they know will be respectful and compliant because they do not want to risk their own name or relationship with us. It is a great source of tenants who are qualified and capable.
That has been the key. Unknowingly, this was just through doing the right thing and taking care of people that we have built a marketing team among our tenants. And they work day in and day out not only to pay the cost of our rental properties, but also ensure we never become vacant by providing us the continuous flow of qualified tenant leads.
3 practical things a landlord can do to earn tenant trust
I wish I had something revolutionary to share. It’s really very fundamental and anti-climactic and centers around three key points.
No. 1 – Provide your tenants with properties that are values
The rents are fair, accurate and reflective of the market and reflective of the condition or desirability of the property. Create a value for your tenants. Don’t be the landlord on the block with the highest rents or the lowest rents. Charge a fair price and create a fair value.
No. 2 – Take care of the property and the tenants needs
Provide a good quality, safe home for the tenants and their families. That does not mean you bend over backward and do things that are not prudent. But you do maintain quality properties. There is not a leaking roof, or running water, or faulty air conditioning or broken windows. The properties are comfortable and they are safe.
No. 3 – Treat your tenants the same way you want to be treated as a landlord
If they call with a question, issue or request, be responsive. It does not mean they are going to like your answer, but be responsive and let them know your answer. Don’t let calls or requests linger. If you called them about a late rent check or drove by the house and saw something that was unsatisfactory you expect a call back and a response quickly. You owe them that same type of responsiveness.
Be an attentive and responsive landlord
Focus on taking care of your tenants and treat them with respect. Even if they are not providing you with tenants as we discussed, there could be other benefits. They may upgrade within your properties. Maybe they are not bringing you tenants, but they may be the next tenant for your next available property.
We have a waiting list right now of long-term tenants whose families have grown as they have stayed with us and they are waiting now for our next available property with maybe with an extra bedroom or bathroom or garage.
That satisfies the same goal of any landlord. It is to keep your properties occupied and it’s wonderful when you have an existing pool of tenants who have already been proven and vetted and who you have a relationship with who are waiting to move into another property you might have available.
Oh, by the way, there is probably a chance this is a higher rent property.
Hey even if they don’t become upgraded tenants or they don’t provide new tenants for you, if you take care of them, they’ll stay. Ultimately that’s the most important thing.
Take care of your tenants and you will get that 100 percent occupancy you are seeking.