Hypothetically, managing rental properties is a great way to make money. With a solid property, you can generally make more money on a monthly basis than you spend on ongoing expenses. That means real positive cash flow on top of property appreciation.
However, property owners tend to make a lot of mistakes in their approach to property management. In addition to purchasing questionable properties in questionable areas, they fumble the management side of the equation and ultimately compromise their potential profitability.
One of the most impactful mistakes here is neglecting communication. But why is communication so important in property management? And how can you achieve good communication?
Why Communication Matters
These are just some of the reasons why communication matters in rental property management:
- Setting expectations. Communication is important for setting expectations. Your tenants should know exactly what the rules are and exactly what’s expected of them, or else both you and your tenants will suffer as a result.
- Resolving conflicts. Communication is key for resolving conflicts, which will inevitably arise. Maybe your tenant hasn’t been paying rent on time. Maybe they’re upset with a repair that hasn’t been sufficiently addressed. Whatever the case, you can navigate and resolve conflicts much easier when both parties are communicating successfully.
- Building rapport (and retention). Tenant retention is massively important for your long-term success. If you can keep your tenants around, you’ll greatly minimize costs associated with vacancies and marketing. Good communication allows you to build rapport with your tenants, so they’re much more likely to stick with you.
- Encouraging responsibility. Proactively and convivially communicating with your tenants encourages them to respect your property and practice more responsibility. For example, they might notify you of issues that concern your property as a gesture of good faith if they know you’re likely to appreciate it.
- Earning referrals. Maintaining good relationships with your tenants and resolving conflicts quickly means you’re much more likely to earn referrals. Your tenants may enthusiastically recommend your properties to other people they know.
Tips for Better Communication in Rental Property Management
You can improve your communication with the following strategies:
- Set the tone early. Set the tone early in the relationship, preferably when you meet the tenants for the first time. Greet them with a warm smile, be friendly, answer all their questions straightforwardly and transparently, and explain your expectations in detail. If this initial meeting goes well, you’ll have a much stronger foundation for all your future communications.
- Put things in simple terms. Even if you’re talking to tenants who are very educated and intelligent, you should put things in simple terms. Speaking concisely and in a plain manner reduces the likelihood of being misunderstood. Additionally, it forces you to clarify your ideas and distill them into a coherent, digestible form. If your lease agreements are complex or full of legalese, take a moment to explain the most important terms to your tenants.
- Provide multiple ways to contact you. Ideally, there should be multiple avenues of communication that can connect tenants to you. For example, you can provide a tenant portal, an email address that you regularly monitor, and even your personal phone number. Explain which of these options should be reserved for emergencies, but make sure all of them are available.
- Be proactive. Proactive communication is much better than reactive communication, so try to get ahead of issues before they become magnified. Anticipate problematic developments and reiterate your expectations whenever you feel it’s necessary.
- Actively listen. Active listening is dutifully and attentively listening to a person in a way that shows your dutiful attention. It’s very important in maintaining your tenant relationships, especially during disputes. Repeat what they’re saying back to them in different terms to show you understand them and give them plenty of space to fully express themselves.
- Respond promptly. Respond as quickly as possible when a tenant reaches out to you, even if you don’t have all the answers right away. An answer like “I’ll work on this as soon as possible and update you when I can” is much better than no answer at all.
- Be empathetic. Exercise empathy to connect emotionally to your tenants. Show that you understand their concerns and that you recognize what they’re feeling. It’s incredibly impactful for deescalating tense situations and building mutual trust.
- Accept feedback. If and when your tenants have feedback for you, accept that feedback gracefully – even if it’s not especially positive.
The art of communication may be difficult to master, but the fundamentals are easy to acquire. As long as you’re deliberately practicing good communication with your tenants, you’ll be in a much better position to make your rental property management strategy successful.