Reasons Tenants Move Out of Their Apartments
By Kim Schmitt, Managing Broker
As a Landlord or Property Manager our goal is to minimize unit turnover rates to insure a steady passive income. Unfortunately, turnovers happen, and they occur due to a multitude of reasons. Let us look at the most common reasons that tenants move out.
- The Tenant Cannot Afford the Rent
- Apartment Size
- Job or Relationship Status Change
- Neighbor Issues
- Maintenance Issues
Throughout my years in this industry I have found the above reasons for tenants moving out to be the most common. As a Property Manager when I received a notice that a tenant was vacating, I would not just mark it on a calendar and call it a day. I would follow up with the tenant to get a good idea of the reason why they want to leave as they do not always disclose that information in the letter. More times than not I have been able to keep the tenant by offering an alternative idea. With this said, there are instances where both the tenant and manager have no choices and the tenant ends up moving out. However, it is always worth the time to look at the big picture and see what can be done to keep a good tenant.
What can we do to keep these Tenants?
The Tenant Cannot Afford the Rent
Reasons that cause tenants to no longer be able to afford rent are usually completely out of our control and often out of the tenant’s control. So, what can we do if we really want to keep the tenant? We have two choices; both may be worthy of consideration. The first is that we could offer to relocate the tenants to one of our lower priced vacancies if one is available. The second would be that we could reduce the rent in order to keep them. If you choose this option, you will want to compare the rent decrease to the cost of preparing a turnover and the time the unit could sit vacant. Say you can keep the tenant by reducing the rent by $50 per month, this comes to a loss of $600 over a 12-month lease. I guarantee that the preparation for the turnover usually costs more than that, plus the loss goes up if the unit sits vacant over an extended period.
This reason comes up when the size of the family changes which causes the tenant to need either a larger or smaller living space. Empty nesters, having babies, new couples or a tenant is becoming single tend to move due to apartment size. Here is what we can do in this scenario to keep the tenant. Offer the tenant a smaller or larger unit if one is available. This would be our first and best option. If this is not possible, offer an incentive such as upgrading their apartment by repainting or new carpet, give them a garage at a discounted rent or for free for one year, or lastly offering a reduction in rent to keep them. This is where we can get creative to keep the tenant!
Job or Relationship Status Change
This is a tough one but not impossible. There is little we can do if a tenant needs to relocate for a job but what if the job change is only financial? Say they are going to have a decrease or increase in salary. In both cases, once again our choice would be to offer them another available unit that would fall within their new price range. This works for increases in salary as well. Maybe they want something bigger and newer. If we have a vacancy that fits their desire, we should offer it to them at this time. Relationships changes such as separation, divorce or marriage could be the reason. If this is the case, then offer any available rentals you may have so that the tenant has the option of staying.
While we cannot always control the next-door neighbors, we can control the type of tenant we move onto the property by utilizing good tenant screening procedures. It is so important to put quality tenants in your rentals. One bad tenant could quickly cause good tenants to move out of your property. In issues such as this it is always a good idea to try and get the tenants to talk out their issues, if they cannot do it on their own then you may need to mediate the situation. If this fails, you can offer a unit transfer to one of the tenants.
Maintenance issues can cause a tenant to move. Tenant’s can quickly become tired of dealing with ongoing maintenance issues such as leaky roofs, pest problems, mold, clogged drains, etc. This is the one issue that we have complete control over by providing an easy way for tenants to report maintenance issues, quick response time and doing periodic maintenance upkeep.
The takeaway from this post is to follow up on notices to vacate, you may be surprised at how your turnover rate drops if you think outside the box of ways to keep your tenants. We at Brio Properties are always looking at the big picture! Visit us often for more tips and tricks of the trade to ensure the success of your rental property investments.