Mike Charton has lived in his apartment for many years. When I asked my fellow author what kept him there, he listed five things. Those five things reflect reasons renters stay in their rental homes for a long time. He first listed the neighbors he has. Second, he can write, rather than working on a house. Third, when the rent paying job sent him to work from home, he had to sign a contract saying the work equipment would be there. “I would need to inform the company about moving.” (That one’s is unique to Mike’s situation, I think.) Fourth, moving is a lot of work. And fifth, not sure moving to another place would balance out in the long run. Translated, it costs a lot to move, not to mention the hassle.
Long-term renters used to be an anomaly, but times have changed. Data from Redfin in June of this year reports that one in six renters, 16.6 percent, stayed in their homes at least 10 years up from 14 percent 10 years ago.
Even though Baby Boomers represent the smallest number of renters, one-third of them stay for at least 10 years. Another third have a one-to-four year tenure. Five-to-nine year renters account for 21.5 percent staying put. Boomers are a special case that we’ll look at in a minute.
The age group that moves most often is the Gen Z’s, Zoomers, born 1995 to 2012, of whom only 4 percent stayed in one place for over five years. That age group has had less opportunity to be long-term tenants since even the oldest of the group wasn’t 18 years old until 2013 and wasn’t 21 until 2016 when they moved out of mom and dad’s house. And some of them have moved back skewing the residency longevity data more. Those born from say 2007 to 2012, the youngest of them still ensconce themselves in their bedrooms in their parents’ homes. Even actual renters have been renting for barely five years.
Eighty percent or so of Boomers own their homes, but most Boomer renters fall one of two categories, renters by choice, that is, lifestyle renters who “don’t want to work on a home,” or low-income, those earning $20,000 a year or less. They also are often single people, reports the Census Bureau.
Redfin posits four reasons people might stay in a rental longer. First, homeownership is out of reach for many people. Second, the number of homes for sale has decreased. Third, move-in rents increased dramatically during the pandemic, and continue to, and renewal rents not so much. Fourth, renting has risen as a lifestyle, becoming more appealing than buying a home.
Also, as Mike pointed out, it costs a lot of money to move, not to mention the huge hassle, thus not something to be undertaken lightly. But people do move occasionally, some for reasons beyond a landlord’s control. One would be if they cannot afford the rent. That could be the result of a job loss or increased expenses such as a medical bill. They might also have landed a job that will require their moving. Higher or lower rent could result, but the option of staying put doesn’t factor in.
Optional reasons include an apartment that’s too small or too large. Others have to do with issues with their current home such as maintenance, where the landlord doesn’t keep up the property, or bad neighbors, where the landlord doesn’t insist on civil behavior from tenants. A bad neighborhood will also send people to a new home, as will separation, divorce, or marriage. Some of those reasons can be affected by the rental owner who can do his or her best to make the situation tolerable or even pleasant for a good tenant.
For rental owners, as you know, it also costs a lot of money to find a new tenant. The profit-making question for the rental owner asks how to encourage their renters to stay where they are. It begins when a new tenant moves in and the landlord shows he or she values that tenant. Maybe just a welcome note with coupons from local businesses, or a follow-up a day or so after they’ve moved in are all it takes. That says to a new tenant that their landlord does care and isn’t just a money-grubbing rent collector.
It continues during the tenancy with regular inspections and fixing what’s broken promptly, maybe within 24 hours. And never promising anything they can’t do or which will take longer than they might think,
Some rental owners ask for feedback from their renters, maybe with a survey form on the company website where the renters pay the rent. The important thing is that then they report the results and tell them what they plan to do to correct any deficiencies, always under promising and over delivering.
Come lease renewal time or even before that, they do something to reward their good tenants by writing and mailing or delivering, not emailing, a thank-you note or give a small gift. The important point is to always appreciate them. They will remember.
Also they know their tenants’ names, their children’s names, their pets’ names, where they work, when their birthdays are. They create a database with all that information.
Finally, don’t trade bad service or conditions for lower rent. Orvel Ray Wilson, author of Guerilla Selling in an article entitled “A Crash Course in Customer Recourse” wrote “Guerillas track both satisfiers and dissatisfiers. Satisfiers and dissatisfiers are independent. That is, failing to provide a satisfier will not provoke a negative response, and providing more satisfiers does not necessarily compensate for a dissatisfier. For example, lower prices (satisfier) will not compensate for poor housekeeping (dissatisfier).”
Substitute “landlord” for “guerilla.” The rent is low but the place is in shambles, paint peeling, much needing repair, just little things, but the place looks shabby. Tenants (especially good ones) don’t think about the rent being low, only that the place doesn’t look very good. They might even think the rent is too high for a “dump like this.”
You can charge market rents or higher if you provide good service, but lower rents won’t get good tenants to trade off for unsatisfactory conditions, only not-so-good tenants, the ones who expect to live in dumps.
Keeping good tenants means keeping your eye on the customer service ball. Never miss an opportunity to do the little things and the big things to provide top-notch service to your tenants. And don’t neglect the opportunity to remind them of what you’ve done. Do these things and you can look forward to having your good tenants stay with you a long time and thank you for being their landlord.
Yes, people are going to move sometimes, but good business demands that we make it something they don’t want to do because you provide a great place to live.
