With Real Estate supply outgrowing demand, increasing cost of building materials, and the attendant low building occupancy rate as a result of current economic recession; it is becoming increasingly important for landlords to devise better tenant retention plan.
This is very important, giving that good location, quality of construction and better facility condition are no longer enough to guarantee high occupancy rate in today’s rent and lease market.
So in cases where location, quality and facility condition are no longer huge differentiating factors, what makes the cash flow difference and helps landlords and promoters achieve their Real Estate investment goal is a tenant’s retention plan that has the following elements:
1. Clear Goal: All tenant retention plans must have one goal – to maintain 100 percent occupancy rate. While some tenants will not review their lease, regardless of the quality of the property management because of factors such as space, relocations, etc, this should not take away from the goal of the plan.
2. Property Assessment: This should appraise the general condition of the property – its location, relative position in the marketplace, a SWOT analysis, and rent structure, etc. For the plan to work, actions must constantly be taken to address identifiable gaps.
3. Tenant Profile: To create a retention plan that works, you must have a clear understanding of the type of tenants you want for your Real Estate asset – in terms of contact information, history of tenancy, etc. Information like these can help you define quick actions to reach out to the right crop of tenants and maintain your occupancy goals.
4. Tenant Satisfaction Survey: A tenant satisfaction survey is an important part of the tenant retention plan. It helps to determine which aspect of property management are satisfactory to tenants and which areas need improvement. The information from this survey can help you devise better strategy to service your tenants better, thereby retaining them.
5. Training Plan: A training plan for staff members must be part of the tenant retention plan. This will be influenced by data collected from the customers’ survey, tenants’ profile and property assessment to see how to bridge identified capacity gaps.
6. Tenant Communication: Tenant communication can be achieved in different ways— e-mails, visits, newsletters, etc. Regardless of the method you choose, a regular schedule for communicating is an important component your tenant retention plan.
7. Exit Interview: While the plan is not to lose tenants, it is an inevitable part of being in the Real Estate leasing or letting market. Exit interviews provide the opportunity to understand why a tenant is leaving. Even if the tenant is leaving because of factors beyond your control, the information from the interview can help you make changes and improvements that can help retain the remaining tenant base.
How are you currently retaining your tenants? Share with us in the comment box