Fix Your Tenant First… Then the Problem: How to Be the Amazon of Landlords [Part 1]

There are 2 guiding principles for residential property investors to deliver tenant service that exceeds expectations. One is to relieve stress and tension in renter relations; the other speaks to maximizing profitability and asset appreciation.

Guiding Principle #1: People (all of us, you too) buy a product or service for what it does and how it makes us feel. Tenants don’t expect perfection and typically will be understanding when things break or other issues surface. How management handles the problem will be the differentiator to determine how the renter feels.

Guiding Principle #2: There is profit for you as a landlord to emphasize how your level of service makes your tenants feel satisfied. Fixing problems is good for your tenants and for you to protect your investment.

In this article, we’ll address both principles to ensure there is mutual satisfaction on the part of tenants and property owners. That is not to say it will be a perfect world, but it will be one that is based on a shared understanding and respect by both parties.

Oh! And what does Amazon have to do with being a landlord. Hang in and we’ll vividly draw that comparison.

 

 

Guiding Principle #1
Tenants seek to have a peaceful, safe place to live with a minimum of interruptions to basic comfort expectations. When the inevitable disruptions occur, how the property manager deals with the issues is what will be remembered by the renter and a building block in both tenant/owner relations as well as the reputation of the landlord.

So exceptional customer service (the customer being your tenant) is critical. And it’s not that difficult to achieve with a bit of self-examination and a commitment to exceed tenant expectations … without “giving away the store”.

The Importance of Culture: Your culture in 6 words, How we do things around here. A culture of being tenant-centric will engage you, your property management employees and contractors with a shared value to do the right thing when responding to tenant complaints and maintenance issues.

Critical Point: Tenant service is an “attitude” not a “department”.

Your culture must support that regardless of job function.

Empower your staff and contractors to fix things, on the spot, or encourage them to call for help when it’s needed. The thing about responsibility is that it’s most effectively taken, not given.

Here’s a three-step blueprint for success.

Step 1: Put yourself in the tenant’s shoes.

Here comes Amazon. A friend of mine ordered a new micro-wave oven from Amazon. Upon delivery, it was obvious that the protective carton was damaged in transit which prompted the concern that there was damage to the oven.

At that point, how did my friend feel about Amazon … disappointed, frustrated, anxious to have the new oven installed and up and running? He contacted Amazon immediately, not knowing what to expect and was absolutely overcome with the quality of service.

First, the customer service rep apologized for the inconvenience and explained how to immediately arrange for the package to be returned at no cost to the customer. Second, he was offered the option to cancel or change his order or to have a replacement of the original order shipped. My friend chose the latter and as soon as Amazon got notification that the oven was on its way, a new micro-wave was shipped before Amazon received the returned item.

  1. So what’s the lesson for tenant service?  Amazon did not start with the premise that the customer was trying to rip them off or be unreasonable in his request for attention to his problem. Everything said and done was to satisfy my friend to walk away feeling really good about Amazon.

So what happens when one of your tenants reports a repair or other deficiency? This is truly a “moment of truth” that will determine how your renter is treated as an individual needing help and not a complaining adversary. Show you care!

 

 

Smile
That works whether in-person or on the phone. Try it. Record your voice speaking the same words while smiling and unsmiling. You’ll be pleasantly surprised at how this communicates caring to the other person. In-person … make and maintain eye contact. You’ll stay more focused on the issues and your tenant will feel you are engaged.

Listen
I mean really listen. Ask clarifying questions to be sure you are getting the full picture of the issue. Then repeat back what you understand the problem to be and get agreement from the tenant that you understand.

Don’t Try to Win an Argument
You are trying to win the customer/tenant. Said another way, you want to fix the renter, not just the leaky toilet. That means moving the customer from angry or disappointed to pleased.

Take Notes
This will be an excellent reminder to you as well as communicate to your tenant that you are paying attention and are truly concerned with resolving the problem.

Step 2: Don’t lie.
Be sure to avoid making excuses … especially lame ones. Excuses are rightfully perceived by the tenant as your problem. Solutions are what they seek. Review options and alternatives and recommend the approach that you can actually deliver on.

Step 3: Act.
Perform on whatever solution you have promised. And then acknowledge that if you don’t follow up, you will foul up. That means check back in with the tenant to ensure that satisfaction has been achieved.

If you and your support staff executes as described, you will be amazed at the strengthened tenant relationships you will nurture.

 

 

Guiding Principle #2
There is profit for you as a landlord to emphasize how your level of service makes your tenants feel satisfied. Fixing problems is good for your tenants and for you to protect your investment.

Customer service plays a substantial role in tenant retention. That’s especially critical when you have a tenant who pays on time and is not overly demanding. Fewer turnovers translate into less expense and enhanced profitability.

Let’s consider the cost of replacing a tenant vs. retaining and extending the lease. Typically you can anticipate a cost of $2,000 to $3,000 depending on refurbishing expenses, commissions and lost rent.

Now weigh the above costs against the potential to extend the lease for a year or more with only minor expenses incurred, e.g. cleaning carpets or painting.

Of course, the nirvana of being a landlord would be to turn a substantial profit with very little tenant contact. By the way, not only is that not likely to happen … it is also not desired, other than as a fleeting flight of fantasy. Customer service is critical to maintain tenant retention as well as being in control of knowing the ongoing condition of your investment property.

So here are some practical customer service best practices to put in place.

  • Implement the 3 steps outlined in the above blueprint. That will ensure you don’t have a lease-prevention culture in place.
  • Initiate two-way communication through blogs or social media and a regularly scheduled newsletter that outlines standard maintenance practices. You can also create a contact form that makes it easy for tenants to leave feedback and complaints so that you my respond promptly.
  • Regularly solicit tenant feedback regarding their satisfaction with the property management team and act on areas that need to be resolved.

Remember, tenants pay down your investment property mortgage, pay your taxes and maintenance costs plus help you build your asset’s value. Treating them with the respect they deserve and responding to their perception of receiving the service they are paying for will cement longer term renter relationships and positive word of mouth that helps you gain trust and grow as a successful residential rental investor.

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