9 reasons for high tenant turnover and how to tackle them

High tenant turnover can be a challenge if you’re an investment property owner. With the potential to directly impact profitability and the value of your investment, taking the necessary steps to reduce tenant turnover just makes good sense.

At the end of the day, a high turnover rate is more than just the hassle of filling vacancies; it reflects deeper issues that could be deterring tenants from renewing their leases.

The impact of high tenant turnover rates,

High tenant turnover is more than just a logistical headache; it also comes with substantial costs and implications that can affect the long-term viability and profitability of your property investments. Some of the tenant turnover costs you might encounter include:

Direct costs,

These are the tangible expenses every time you lose a tenant:

• Vacancy costs: Lost income during unoccupied periods.
• Marketing expenses: Costs for advertising and attracting new tenants.
• Maintenance and repair costs: Preparations for prospective tenants, including repairs and upgrades, and the cost of a real estate agent if needed.
• Administrative costs: Expenses related to finding a new tenant, including tenant screening, lease handling, and property transitions.

Indirect costs

These are less quantifiable but equally important.

• Community stability:Frequent changes in tenancy can disrupt the community and lower overall tenant satisfaction.
• Reputation:A high turnover rate may result in your rental property being less desirable, making it even harder to find quality tenants.
• Operational strain:Managing frequent turnovers can take up a lot of precious time – time you could use to focus on proactive property management.

Reasons for high tenant turnover

1. Rent increases

Rent increases are a common trigger for tenant turnover, especially if they’re significant, frequent, or out of line with local market conditions.

Your tenants are more likely to accept adjustments to their rent if they perceive them as fair and reflective of genuine improvements to the property or services provided.

So what can you do here if a rent increase is needed? At the end of the day, effective communication is the best way forward. It provides your tenants with transparent explanations and advance notice, which can help manage any dissatisfaction that might come up.

It can also be nice to offer flexible terms or enhancements in line with the new rate. This can make them more inclined to stay despite the increase.

2. Local job market health

The health of the local job market can be a pivotal factor when it comes to tenant turnover. Economic downturns or job scarcity in the area can prompt your tenants to relocate in search of better employment opportunities, leading to higher turnover rates.

That said, a booming local economy and plentiful job prospects can attract and retain tenants, fostering a stable rental community.

This is a tricky one to mitigate, but as a property owner, staying informed about local economic trends and future job market forecasts can be crucial. This awareness allows you to anticipate potential changes in tenant behaviour and adjust your strategies accordingly, like timing market-driven rent adjustments or improving marketing efforts to attract tenants who might be newly relocating for jobs.

3. Responsiveness to maintenance requests

Property management and landlord proactivity can play a huge role in tenant’s moving on, particularly when it comes to maintenance requests. Prompt and effective responses to maintenance issues are crucial for tenant satisfaction; delays or negligence can lead to frustration.

On the other hand, professional and courteous communication from property management can improve tenant trust and satisfaction. Whether you’re self-managing your property or are using a Perth property management team, it’s important a positive relationship is fostered and maintenance requests are addressed quickly.

4. Quality of management

We said it earlier and we’ll say it again – effective communication and quality interactions play a pivotal role in your tenant relationship and retention. Professional, respectful, and responsive communication not only fosters a positive living environment for your tenants, but also builds trust.

This is why hiring skilled property managers is essential in reducing tenant turnover. They need to be adept at handling tenant issues with tact and efficiency, ensuring that all interactions, even ones where issues arise, ultimately contribute to a positive tenant experience.

Read our blog on how to handle tenant disputes.

5. Outdated fixtures and appliances

Generally, modern tenants often prioritise properties that offer up-to-date, functional, and aesthetically pleasing environments. It is their home after all!

If tenants feel like their living space is falling behind in terms of technology or style, especially compared to newer listings at similar price points, they might consider moving to something a bit more updated.

Make sure you regularly evaluate and update your fixtures and appliances to prevent this.

6. Common area maintenance

The condition and maintenance of common areas are crucial in shaping your tenants’ living experience and their decision to stay or leave. Well-maintained communal spaces like lobbies, gyms, gardens, and laundry facilities improve the overall appeal of the property, plus contribute to a sense of community among residents.

This is generally the responsibility of the strata; if you own a property within an apartment complex, keep track of whether common areas are being cleaned and updated, and raise it as an issue if not.

7. Bad neighbours

Issues like noise disturbances, lack of cleanliness, or general disruptive behaviour can make living conditions downright miserable for your tenant. This is a slightly trickier one to address if you don’t also own the neighbour’s property. Again, communication is your best bet; you might reach out to the neighbour to discuss the problem and find a mutual resolution.

If that’s not possible, you could look at introducing some more soundproofing measures to your property, like insulated walls and double-glazed windows. There are also avenues you and your tenant can take in terms of filing noise complaints or even requesting legal intervention if necessary.

8. Changes in the neighbourhood dynamic

This is an external factor, but can play a huge part in tenant turnover. If the neighbourhood undergoes some significant changes in terms of safety and amenities, your tenant is more likely to up and leave. On the flip side, improvements like new shops, parks, or enhanced safety measures can make an area more appealing.

As a property owner, it pays to be aware of these dynamics and consider them in their property management strategies. You might even advocate for local improvements! But it will also help to stay on top of it to know when to sell and move your investment focus elsewhere.

9. Accessibility to transportation and essential services

Rental units that provide easy access to public transit, major roadways, and amenities like supermarkets, schools, and healthcare facilities are generally more attractive to tenants. It pays to do your research and ensure your investment is well-located, or in an area where there are planned improvements to infrastructure.

Key tips for lower tenant turnover rates

If you’re still a little unsure about how to be proactive and prevent tenant turnover, here are the key takeaways:

• Align rent pricing with market conditions and property values
• Regularly update interiors and exteriors
• Address repair requests quickly
• Maintain good communication
• Show tenant appreciation
• Give lease renewal incentives
• Improve property security
• Offer flexible payment options
• Implement feedback systems
• Carry out effective tenant screening and background checks
• Get professional property management

Secure your property’s future with professional property management

Find the best candidates for your property with our step-by-step tenant screening guide.

The best way to reduce tenant turnover? Leave it to our residential property management Perth team. With years of experience managing properties and tackling common issues that arise with ease, it’s the best path to a stress-free investment.

Give us a call today!