Successful commercial property investors all know about the importance of ensuring tenant satisfaction. After all, commercial income property follows the same rules of any successful business: higher customer satisfaction results in higher profits.
Unfortunately, it’s easy for investors to overlook this fact, relying instead on less time-intensive methods of increasing profit margin such as raising the rent or cutting back on services.
What most investors don’t realize is that increasing tenant satisfaction has a direct impact on net profits. Research conducted by JLL shows that losing a tenant results in lost revenue that may take up to two years in order to recover.
Even if you’ve already outsourced your income property management to a management service, ensuring the management plan aligns with your long-term investment goals is a critical part of successfully maximizing your commercial investment property’s potential.
Here are some of the fundamental components of a successful strategy for maximizing occupancy and ensuring tenant satisfaction:
Use Online Technology To Attract Prospects & Give 24/7 Tenant Service
Nielson reports show that Americans spend more than 11 hours per day online, with the majority of that time spent on smartphones. In fact, adults spent more time online than they did sleeping.
Most companies understand the importance of maintaining not just an online presence but have begun to hybridize their services, offering a portion online when possible. As a result, both prospects and tenants expect 24/7 access to your company, with good customer service one of the prime determinants of client satisfaction, according to an international survey conducted by the Building Owners and Managers Association (BOMA).
In the survey, 3 of the top 5 factors which tenants said affected their satisfaction level were all service-oriented:
- property management and property management communication
- maintenance and engineering
A good online software platform can allow you to maintain a web presence while allowing you to minimize the amount of staff needed to manage your income property. Instead of waiting for a busy staff member to be free, this software allows you to automate routine tasks, as well as give staff members essential information about property management or maintenance.
The same software can act as a virtual marketer. By uploading pictures of the property along with floor plans and a brochure with relevant details, prospects can view a property, it’s layout, and decide whether or not the price is right for their budget, at any hour, and all from the comfort of their own home. There are even programs that allow prospects to experience a 3D walkthrough of the property.
Tenants also benefit from having 24/7 access to their accounts online. Secure accounts allow tenants the convenience of paying bills, viewing utility usage, or downloading standard documents such as a tenant handbook.
Some programs will even forward a tenant’s maintenance request straight to the service provider. If the service provider is already in the building, this allows him to attend to the client before he leaves, saving valuable time for the tenant and money for you.
On the back end, the software can keep track of which supply and maintenance orders were requested – both from tenants and from service personnel as well as expected time to completion and exact costs of materials and inventory. This data can then be collated and a customized report automatically generated, making it easy for the investor and manager to analyze potential areas of improvement in managing the property.
Focus On Providing Effective Communication With Tenants
Effective communication between investors, management, and tenants creates a win-win situation by fostering goodwill and ensuring that all parties are working towards the same goal. It is also one of the top factors in reducing tenant churn and ensuring tenant satisfaction.
Keep in mind that there are two types of communication: one-way, such as fliers or tenant manuals, while two-way communication offers each party an opportunity to participate in the conversation.
As an investor, it is critical that you ensure your property manager has a system in place that allows for a timely response, and ensures prompt follow up of tenant concerns, even when a problem remains unsolved. The BOMA survey results revealed that tenants prefer a response from their manager within 2 hours, and never longer than 24 hours. In fact, tenants stated that even a response acknowledging that the request was received is preferable to no response.
One of the easiest ways to do this is through social media. Both Twitter and Facebook offer a way for tenants and management to communicate in an environment that is familiar to both. Social media is also an effective way to distribute important announcements, survey tenants, and establish an engaged community within the investment property.
The methods above are excellent methods for improving tenant satisfaction. However, the best way to ensure tenants are satisfied is to exceed tenant expectations whenever possible. Not only does exceeding expectations give you leeway when dealing with the inevitable mishap, but they also create an environment of trust and understanding – both of which ultimately improve your bottom line.