Investing in Long-Term Tenants

The age-old struggle for property investors is maintaining the balance between income and expenses. Initially, investors have to weigh the acquisition costs against the anticipated return. Throughout ownership, there is the need to make repairs, update capital components and invest in preventive measures to avoid higher cost repairs in the future.

One area that is not considered very often, is the value of investing in long-term tenants. Seasoned investors will agree that aside from major capital repairs, the mostly costly event for a rental property is a vacancy. During a vacancy we experience the triple-whammy of income loss, cosmetic repair costs and lease up expenses. We also take the risk of beginning a relationship with a new resident, and setting new expectations. A long-term tenant can be the most lucrative aspect of a successful rental property.

Although there is no fool-proof way to guarantee a tenant will stay for 3, 5, 7+ years, taking a long-term perspective to short-term problems can go a long way towards accomplishing that goal. Here are a few ways that a landlord can “invest” in long-term tenants:

• Discounting the initial rental rate is a great way to attract solid tenants who know they will be approved for any property they apply for. They have the best credit scores, the highest incomes and are looking for the best deals in housing.

• Being responsive to tenant maintenance requests and giving them the benefit of the doubt when the responsibility for a maintenance issue is a grey area. A dispute over a small maintenance repair can lead to a disgruntled tenant who may decide not to renew at the next lease expiration. A $200 investment into good will could save thousands in avoiding a vacancy.

• Being proactive with showing appreciation to good tenants. Unexpected tokens of appreciation (a gift card at Christmas, a small upgrade at renewal time, etc . . .) can go a long ways to helping a tenant feel comfortable in their home.

• Staying on top of capital repair items can avoid the strain of being without a key component while repairs or replacement is done. Replacing an air conditioner is expensive in its own right, but leaving a tenant in the heat for a week because the AC went out over a holiday weekend in the summer time is costly both in regards to the capital expense as well as the lost good will with the tenant.



Investing is all about putting something in and getting more out. When it comes to keeping good tenants happy, there are many things a wise investor can do to increase the odds of a tenant staying long-term. And that’s the best return any rental investor can hope for!