The Net Effect of Losing a Tenant
As a property manager, it's important to review your tenant experience every time you lose a tenant. You need to understand whether their leaving is a reflection of your service and overall tenant experience. You can't provide the best property and facility management and tenant support without knowing why your current systems don't work.
So, why do tenants leave? What are the costs of losing tenants? Below we’ll share our answers to these questions, showing the net effect of losing a tenant due to a bad tenant experience.
Why Do Tenants Leave?
Tenants may have various reasons for leaving your property that have nothing to do with you. These may include the relocation of their business, their internal business issues, their personal issues, the need for a different (bigger or smaller) commercial space, etc.
However, your tenants could also leave due to a poor experience with your property and the management thereof.
What Is A Bad Tenant Experience?
Several things contribute to tenant experience. These include communication, support, transparency, accessibility, and visibility. Your tenant is your customer and you need to cater to them in that way.
What creates a bad experience varies from tenant to tenant but the values above are some of the universal ones you should prioritise.
When tenants feel unsupported or that they cannot communicate their issues with you, they may feel that you do not care about them. Your tenants also need regular updates on important updates about your facility. Keeping them in the loop is a primary part of keeping them satisfied.
Transparency, accessibility, and visibility are parallel characteristics of communication and support. Essentially, the best way to avoid a bad tenant experience is to create open and regular channels for all communication and support.
The Net Costs Of Acquiring New Tenants Vs. Retaining Current Tenants
Tenant turnover is costly! It is not just the amount you lose from their monthly rent. You need to consider the costs that go into attracting new renters. This includes the money you need to put into your premise listings and marketing.
Not having a tenant has other practical costs in comparison to retaining your current one. You don't know how long it will take you to find someone to occupy your facility. And if that goes on for months, you lose months’ worth of rent, which eats into your profits.
You have to think about the lifetime value of your tenants. This is the profit you stand to make for as long as a tenant rents your property. You can calculate your tenant lifetime value (TLV) by looking at how long your tenants stick around on average. Essentially, you want to get more from your tenants than what you’ve invested in them.
Acquiring new tenants is much more costly than retaining your existing ones. Considering this, it’s vital to have proper tenant communication and support systems in place.
Make sure that your tenants can get in touch with you should they have any problems and involve them in the management of the property by keeping them up to date with announcements. This creates transparency and helps you to build a stronger relationship with your tenants. As a result, you will increase the lifetime value and profits of your tenants.
If your organisation is looking for a 360° tenant experience tool to involve all employees, service providers and tenants to improve the quality of your operations, have a look at the 30-day free trial of Falcony Tenant Portal:
We are building the world's first operational involvement platform. Our mission is to make the process of finding, sharing, fixing and learning from issues and observations as easy as thinking about them and as rewarding as being remembered for them.
By doing this, we are making work more meaningful for all parties involved.
More information at falcony.io.
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