When it comes to filling your properties, not all tenants are created equal. The best-case scenario for investors? Finding tenants who are looking for a long-term home, not just a place to stay for a few months or a year.
Long-term tenants provide consistent income that you just won’t find if you have people moving in and out all the time. Let’s say you had two tenants — a tenant who stayed in your property for a year and a tenant who stayed for two years. When you factor in all the costs associated with turning over a property — from paying commissions to remarketing the property and finding new tenants to repairs to vacancy costs — that year can literally mean thousands of dollars back in your pocket.
In addition to saving you some serious cash, long-term tenants are also less time-intensive; when you have a tenant who stays in your property for a few years (or more), you don’t have to constantly invest the time it takes to find new quality tenants. And because the tenant looks at your property as their long-term home, they’re much more likely to take care of it — and you’re a lot less likely to have to deal with property damage.
Clearly, long-term tenants are the ideal demographic to get into your property. But how, exactly, do you find them?
Finding Long-Term Tenants Without Breaking the Rules
Now, obviously, you want to find long-term tenants — but you need to make sure you do so while staying within the Fair Housing Rules. And the best way to do that? Extending the lease term.
Most standard leases are 12 months. By extending the lease term to 18 (or even 24) months, you’ll attract a different kind of tenant — the kind of tenant who’s looking for a home for the long term.
You can also figure out which applicants are likely to be long-term tenants by evaluating their current situation during the tenant screening process. Did they just get a great new job offer that’s bringing them to the area? Do they have a child they’re about to enroll in school down the street? Is there anything going on in their life that would encourage them to plant roots?
If their current life situation is conducive to staying in one place for an extended period of time, chances are, they’ll be long-term tenants.
You can also determine if a tenant is likely to stay for the long term by looking at their past rental history. Like the old saying goes, “The best predictor of future behavior is past behavior” — so if they have a history of staying in a place for years at a time, chances are, they’ll do the same for you.
Why LEAP Excels at Finding Long-Term Tenants
Now, not to toot our own horn — but at LEAP, we’ve got the process of finding long-term tenants down to a science. We take the time to educate our investors on the two most important factors to attracting high-quality, long-term tenants: price and condition. The best tenants — the kind of long-term tenants our investors want to attract — have great credit, great rental history, and a solid income. They can get approved for any property they want. So the key to getting them into our properties? Making sure they’re in amazing condition — and that they’re priced competitively.
How to Attract and Retain Long-Term Tenants
So we’ve established that getting long-term tenants into your properties is crucial. Before we wrap things up, let’s do a quick review of the best ways to attract and retain those tenants:
- Extend your lease term. Having a six-month lease term won't attract long-term tenants. If you want people to stay in your properties for an extended period of time, you need to extend your lease term.
- Look at past rental history. If a tenant has a history of bouncing from property to property every few months, chances are, they’ll to do the same to you. Only rent to tenants with a stable rent history and a track record of staying in one place for an extended period of time.
- Assess their current life situation. If you want a tenant to stay for the long term, look for tenants who have ties to your area, whether it’s through a steady job, a child in school, or strong social ties. The more reasons they have to stay in your area, the more likely they’ll be to stay in your property for the long term.
If you want to protect your income and your properties, you need to find long-term tenants. And now that you know the steps to attracting the right kind of tenants, you have everything you need to fill your properties with responsible tenants who will be with you for years to come.