Ideas for Owners
Most new property investors worry. Make that "all new property investors worry." It is true that owning a property that is occupied and cared for by someone else requires a strong constitution and a commitment to the investment.
We have found that most investors, however, worry about the wrong things. Yes, eventually someone will damage the house, and someone else is likely to bounce a rent check and skip out. And, those are unfortunate and expensive events which, over a long period of time, will happen.
However, our tenant screening, substantial damage deposits, and attention to detail keep these to an absolute minimum. In our first year of operation, with 101 properties under management, each of these has happened only once.
The REAL concern should be "turnover." Here is a startling statistic: over 65% of leases, nationally, are not renewed. Why? First, many tenants (about 20% in our experience) lease a home with no intention of being there more than a year. They have plans- maybe to buy a home, maybe to move to a new city, maybe to move to a larger or smaller home in a year. We cannot prevent this...it is just the way things are.
Every time a tenant does not renew a lease, the cost is about equal to the rent for a month and a half. So, reducing tenant turnover is one of our biggest concerns, and one to which we pay a great deal of attention. Of the 65% of tenants who move out, about 50% do so because of one of two reasons:
- they think they are paying too much, or
- they feel that their needs were not properly met by the manager or the landlord.
Like Diamond Realty and Associates, LLC, our founding company, we have a reputation for handling many high-end properties. Tenants for these properties can be choosy and particular…just the way we like it. We specialize in choosy and particular, and keeping them happy with excellent response to their maintenance needs is of great importance. Those folks who are forced to go without air conditioning for more than a day or two are probably NOT going to renew. The ones whose air conditioner was fixed immediately are probably going to remember that excellent service when renewal time comes around.
The point is, everyone deserves excellent service and a respectful response. You do, as the owner. In fact, you demand it. Well, so do tenants. Their needs may seem like minor details to some managers, but not to us. WE WANT THEM TO BE VERY PLEASED WITH OUR SERVICE. We want them to know that we care about their comfort. And every opportunity to please them is another reason for them to renew their lease. Think about that when a plumber or A/C technician charges time-and-a-half for weekend or nighttime service. Yes, it was expensive...but it was worth it. Over the life of a ten year investment, reducing turnover from six times to three will save about seven thousand dollars. And that seven thousand will go a long way toward covering maintenance/repair costs.
In this section
Contact UsDiamond Property Management, LLC
315 East Texas Street
Bossier City, LA 71111