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This time, it was distributed on CONSPIRIT's official channel on YOUTUBE.Episode 32: Boost your quality of life with real estate management!I would like to send you the contents.

It's been heard a lot recently, so many people may already know about it.
This is a very basic and important concept when it comes to running a real estate rental business.

What is tenant retention?

"Tenant retention."
It means exactly what it means in Japanese,

Tenant = Lessee
Retention = retention

That's what it means.
In the CPM leasing course, we learn that "the best way to prevent vacancies is to keep tenants living in the property."

In the past, when a tenant moved out, the common procedure was to restore the property to its original state, instruct a rental agency or management company to start looking for new tenants, and find a new tenant after a certain period of time.
However, leasing costs are currently rising across the board, and there are cases where even recently built properties or properties close to train stations are struggling.

When this happens, you may have to lower the asking rent, eliminate the deposit, offer free rent, or carry out major construction work, etc.
The end result is reduced income and increased expenses, which is an undesirable situation for the owner.

This is where the idea of tenant retention comes in.
If people move out, it will cost money and energy. So, we need to be proactive in taking measures to prevent people from moving out.

The reason why many stores offer point services and mobile phone carriers offer long-term discounts is essentially to "lock in customers," and it can be said that this same perspective can also be applied to the rental property management business.

Of course, from the tenants' perspective, they choose to rent because they can move according to their life cycle, so it can be difficult to persuade them to stay if their reason for moving out is to change jobs, get married, or have children.

On the other hand, cases where negative reasons for moving out, such as the management company's slow response, unwillingness to pay renewal fees, or poor maintenance of the building, need to be eliminated as much as possible.

Tenant Retention Examples

The term "tenant retention" does not refer to a specific, "correct" measure, but rather to a general understanding of measures to create a system that encourages tenants to renew their tenancies and motivate them to continue living in the property.

If you think of rental property management as a service industry, there are probably many ideas for increasing customer satisfaction in order to retain customers, such as increasing the number of cleanings and patrols, or introducing long-term discounts on renewal fees.

It's a different story if the property is in a great location or of a high standard, but these days it's not uncommon to find a property with no deposit or key money whatsoever.
In the old renter's market, it was possible to generate large initial profits by rotating property movements over a short period of time.

However, nowadays, the cash outflow when moving out tends to be larger, so it is only natural that people think that it is important to take preventative measures to avoid people moving out.

The benefits of tenant retention

By preventing unnecessary evictions,

①Recruitment costs

Brokerage fees, AD (advertising fees), and free rent

②Restoration costs upon moving out

③ Lost profits during vacant period

This means that things like this can be prevented.

In properties with a large number of families with children, some are experimenting with encouraging residents to form communities among themselves, creating an environment in which they can easily settle down.

summary

In any case, in order to implement tenant retention, it is essential that the property owner and management company are in sync with each other's ideas.

The rental property management business is also a legitimate service industry. Choosing a management company that has the perspective of increasing customer satisfaction may be one of the reasons for success.

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