Your Tenant is Your Customer
We are considering the five basic elements of property management and in our last post we discussed the rental property itself. Continuing, the third basic element of property management is the tenant.
In any business the aim is to make money by offering something that people want and delivering that product or service with excellence. Starbucks provides premium coffee in an agreeable social setting. Uber provides rides for hire with efficiency and economy. Hampton Inn provides clean, comfortable rooms for short-term stays, with a “free” breakfast.
The owner of a rental house is providing an essential product in the housing marketplace: a home for someone who needs a home and is willing to pay for it. And the customer that is being served in this transaction is the tenant. Kind of obvious, right? Yes, but let’s think more about what it means that the tenant is your customer.
A landlord must always keep in mind that he or she is offering both a product and a service. We discussed in our last post that the rental house is the product being offered by the landlord and this product must be prepared properly so that it can be marketed successfully and “sold” to a prospective renter.
But the landlord/tenant transaction is not completed at the lease signing desk; it is only begun there. The tenant now has the obligation to pay rent monthly, and the landlord has the reciprocal obligation to serve the tenant in an ongoing basis throughout the term of the lease. And what is the nature of that service?
It boils down to this: maintaining the product, the rental house, in the condition in which it was promised. Prompt and effective maintenance work is the most important benefit a landlord provides a tenant after the ink is dry on the lease. Surveys have repeatedly shown that the most significant factor in tenant satisfaction is the quality of the maintenance service provided by the landlord when it is needed.
The other primary contributor to tenant satisfaction is being treated well by the landlord’s staff. Friendly, respectful communication by the associates of the landlord who interact with the renter goes a long way toward causing the renter to say, “I like living here” and wanting to renew his or her lease.
And when a tenant renews the lease the owner saves a ton of money. A unit turnover costs the owner twice: once in lost income during the vacancy, and again in the hundreds or thousands of dollars in expenses required to make the unit ready for a new renter.
So serving the customer, the tenant, well is essential to making the rental owner successful and protecting his bottom line. That’s why an excellent property manager will make sure that a tenant always has pleasant and professional interactions with staff members and that maintenance requests are handled in a timely and competent manner.
After all, it is the tenant who finances the whole investment property enterprise. In our next post we will take a closer look at the money that flows among tenants, managers, and owners.