What Causes Tenant Turnover and How to Reduce It

Tenant turnover can lead to an increase in vacancy between tenants, ultimately leading to a period that can be very difficult for landlords as there is no income being generated from the unit, yet expenses are still expected to be paid. For this reason, your goal as a landlord should be to reduce turnover and get your tenants to renew their leases and stay in your unit long-term.

In this blog, we will discuss reasons as to why tenants may not choose to renew their leases and steps you can take to reduce tenant turnover.

Why Tenants Don’t Renew Their Leases

There are naturally many reasons a tenant wouldn't renew their lease, but if you're experiencing high-turnover rates, it might be due to the following reasons:

1. Unsafe Building Environment

A tenant may choose to not renew their lease if they feel unsafe or uncomfortable around their neighbors or in the neighborhood. It's essential for a tenant to feel safe in both their home and their community, which is why this is a common reason for tenant turnover.

Often, this will come down to the neighborhood, and you can’t really exert your control beyond the walls of your building. However, to ensure residents feel safe in your building, it's vital to conduct background checks on all prospective tenants and take the time to properly screen them before signing a lease agreement. In order to thoroughly screen an applicant, you may request a credit check, background check, as well as the contact information of both the tenant’s employer and previous landlord.

You may also request that prospective tenants have an interview with you before signing a lease agreement. This can help you get a better understanding of the applicant and assist when determining if they are a quality tenant.

2. Poor Building Management

Unlike the neighborhood your building exists within, you have a significant amount of control in ensuring building management is creating a welcoming and helpful environment for tenants. To run a profitable business, you need to ensure that your buildings are well-managed and desirable places to live with low turnover rates. 

One reason that tenants may choose to not to leave an apartment is if they feel they do not receive timely responses to complaints, inquiries, or repair requests. While it's impossible to address every tenant right away, it's vital that you make sure your tenants feel heard. This means responding to them in a timely manner and hearing them out.

It can even be beneficial to include a clause in your lease agreements that states a timeframe in which they should expect a response. This way, they know what to expect when reaching out, and you can hold your employees accountable to meeting those expectations.

3. Personal Reasons

Unfortunately, no matter how well you run your business, there is no way of completely preventing tenant turnover as there are a number of personal reasons that may cause tenants to leave. Some of these reasons may be an increase in cost of living, employment changes, or a change in lifestyle.

Tenants may experience a number of events that are out of your control. For example, the tenant may be given the opportunity to move to a different place for their work, or they may decide to begin looking to buy a house rather than rent.

How to reduce tenant turnover

Regardless of the reason, landlords must accept that it's nearly impossible to completely reduce tenant turnover to zero. However, that doesn’t mean that you can’t pursue strategies that can help you significantly reduce tenant turnover.

Trying the following strategies can help your buildings experience less turnover, become more profitable, and build a better reputation among renters, helping you fill vacancies quickly when they do occur.

Use Property Management Software

Regardless of your experience, all landlords will make mistakes from time to time when managing a number of units. However, in order to reduce the number of mistakes made, it can be helpful to use property management software. This allows the landlord to keep all necessary information in one place, making it easy to track, analyze, and automate.

Allow For Communication Between Tenants and Management

If a tenant feels ignored, they may grow to resent the landlord and leave as soon as their lease expires. Not only will this leave you with a vacancy, but you also run the risk of having them leaving negative reviews online which can damage your chances at finding another quality tenant.

It can also help to have a formal system in place to give tenants a sense of security. This system can clearly state all rules and regulations, who should be contacted for maintenance requests, and where tenants are able to access information in regards to their tenancy. This will help your tenants feel safe and in control.

Perform Thorough Tenant Screenings

To ensure residents are financially prepared to rent, and to ensure that all other residents feel safe in your building, it's vital to conduct background checks on all prospective tenants and take the time to properly screen them before signing a lease agreement.

As part of a screening, you may request a credit check, background check, as well as the contact information of both the tenant’s employer and previous landlord.

You may also request that prospective tenants have an interview with you before signing a lease agreement. This can help you get a better understanding of the applicant and assist when determining if they are a quality tenant.

Outerbridge Law

If your property is seeing a lot of tenant turnover, it may be a sign that there are improvements that can be made. Improving communications between tenants and management, using a property management software to keep tabs on your building and maintenance requests, and performing a thorough screening of all tenants can help reduce the level of turnover your property is experiencing.

Being in the property management business in NYC is no simple task. In addition to contending with tenant turnover, you may find yourself struggling with non-paying tenants or damage to your units. Fortunately, you don’t have to face these challenges alone. Outerbridge Law P.C. is a NYC-based law firm working with years of experience arguing landlord-tenant cases. If your business is being threatened, don’t hesitate; contact Outerbridge Law today to see if you have a case.