No Landlord wants to face constant tenant turnover. Identifying the main reason tenants leave may help to minimise vacancies.
Why Tenants Leave #1 – It’s Too Expensive
A change in earning capacity, or a change in the type and number of properties available in the local area, can prompt a tenant to consider moving. There’s not much you can do about a tenant’s earning capacity, but you should always keep an eye on how much comparable properties in the area are renting for. E.g. if you can rent a brand new home just a few streets away for the same price, you could lose your tenant to a perceived upgrade.
Solution: Your property manager should prepare an annual CMA or Comparable Market Analysis report to aid in setting the rent. Pay attention to things like wear and tear or where a property is becoming dated. You may need to upgrade fixtures, appliances, carpets and paint to attract the right tenant and the right price. Know your market.
Why Tenants Leave #2 – Upsizing or Downsizing
Marriage, a new addition, divorce, a child leaving home or an in-law moving in can all change how much or how little space is required.
Solution: The demand is always highest for 3-4 bedroom homes with 2 bathrooms and double car accommodation. Targeting properties with those attributes can protect you from the extremes of resizing – especially in the more affordable suburbs. E.g. 2 bedroom units have higher turnover than 3 bedroom houses.
Why Tenants Leave #3 – Maintenance Problems
Tenants very quickly move on when they feel that appropriate standards of condition and repair are being neglected. Constantly having to deal with leaks, mould or a broken appliance which hasn’t been replaced, can actually lead to an owner being breached by the tenant, and in more extreme cases to a Court decision permitting the ending of a Lease
Solution: Attend to maintenance regularly and promptly to preserve the condition of the property. Staying on top of this can help keep the cost to a minimum. Fresh paint and new carpets every 7-10 years will ensure the property is always in demand. Tired properties can tend to attract the less desirable tenants and a fall in the return, leading to a downward spiral for the property.
Why Tenants Leave #4 – Relocating for Work or Schooling Opportunities
A new job or transition to either a new school or university can be a trigger prompting tenants to relocate.
Solution: When buying investment properties always thoroughly investigate the local employment and schooling opportunities as well as proximity to shopping, medical and transport facilities. Certain schools are so popular that tenants will actively seek to live in the catchment zone to qualify for enrolment. If you do face a vacancy, at least it should be a short one if you purchase in the right areas.
Why Tenants Leave #5 – Neighbour Disputes
There is an old saying that good fences make for good neighbours. Other issues can be noise complaints, barking dogs, not feeling safe, or too many cars being stored or worked on at the property.
Solution: Always provide quality privacy fencing. Security screens and motion sensor lights can create a feeling of safety. Ensure your property manager is asking how many vehicles will be stored on the property. Pets are great as long as the number, size and behaviour is in check. Sometimes it may be another neighbour who is the problem. Always try dispute resolution before things get out of control.
Why Tenants Leave 6# – Buying Their Own Home or Upgrading
There is little you can do about a tenant who has purchased their own home – beyond wishing them well. It remains important to note though, that in our world where people value the nice new homes with their current décor and appliances, they can often be found in less convenient locations from a transport and lifestyle perspective.
Solution: By keeping your property presenting in good condition, attending to maintenance as it arises, refurbishing every few years and keeping gardens low maintenance and presenting nicely will help your property to remain competitive in the rental market.