In this episode Carla and Adrian get real about what tenants really (really) want, and more importantly expect in todays competitive rental housing market.
Welcome to Canada's Property Management Podcast, your number one resource for investing, managing, and maximizing the value of your real estate assets. And now here's your host, Carla Browne and Adrian Schulz, Canada's rental property experts.
Adrian Schulz (00:18):
You asked me if I'm starting and before we started, you said you could see me on stage as a Spice Girl. And that's why we're titling this episode as: What do tenants want, really, really want? I think for copyright purposes, we can't actually play the song, but if you're watching, Carla is going to entertain us with one of the dances. Carla, go ahead.
Carla Browne (00:48):
This is not going to happen. And remember right now, this is a podcast. We are like audio only for this one. I'm going to make sure of that.
Adrian Schulz (00:56):
Right. Fair enough. Okay.
Carla Browne (00:56):
No dance moves here.
Adrian Schulz (00:58):
But what a great topic. I've been a tenant at the beginning of my home journey. Have you been a tenant, Carla?
Carla Browne (01:06):
Adrian Schulz (01:07):
And what did you really want?
Carla Browne (01:10):
Well, I would say going back in time many, many years ago, I felt fortunate that I had a place. I felt fortunate that I was being accepted to be into this unit. And I think times have really changed when it comes to that, that I rented because I couldn't buy a house. I don't know if you were the same way like me.
Adrian Schulz (01:34):
For sure. Young out of school and needed a place to live that was not near parents.
Carla Browne (01:38):
Yeah. Right. Which is funny because the first place I rented was literally down the street from my mom's house. I could have carried all of my belongings in a box. I didn't even need a car. I just like the area. I actually still live in the area so that's kind of interesting. I did leave for a short time. Anyways, digressing from the actual conversation here.
So I think that going back, tenants rented, they rented because they had to rent. So not that we were desperate, but we were cautious of where we were going, but we really just wanted to be accepted when we found a good place. I think times have really changed now and tenants rent; some because they can't buy of course, but a lot rent because they've made the choice to rent. So they are much more pickier and choosier on where they're going to rent. They want to know a lot more about the property, the landlord, these kinds of things. So we'll dig into some more specifics, and I think COVID has really blown this part up. That tenants... I don't want to say that they're demanding, but they have needs and wants and they are expecting them to be met.
Adrian Schulz (02:45):
Yeah. I think that the number one thing that I find when I'm looking for a home is it clean and is it well maintained? And I think that's a bit of a shift since you and I may have originally sought out a rental, is how savvy the tenant or resident consumer has become in the last five, 10 years. And I think the reason for that is a lot of these purpose-built rentals that spend so much money on consumer direct marketing has just made the renter so aware of what is possible with a rental home. And I think it has increased or heightened the expectation of what you can have in a rental home.
Carla Browne (03:34):
Yeah. Good point. I never thought of it from that perspective, but I think that also has driven it as well. And the key thing I think that you said there is they want a home. So don't call this like a rental unit. This is their home, and as landlords, investors, property management companies, we want them to think of it as their home because as soon as they think of it as their home, they're going to take care of it. That's how you really need to present it.
So I would say the number one thing that comes across when tenants come to us and maybe they weren't happy with the previous, or they start to talk about certain things so you know that's at pain point that maybe they've experienced previously, is they want to know how we work maintenance. They really want to know that if something goes wrong, we are going to pay attention to it. And that this isn't going to be a long drawn out process and we're going to brush it under the rug because it's... and this was from our previous podcast, just a rental. You know my feelings [inaudible 00:04:30].
Adrian Schulz (04:30):
So how do you answer that? How do you answer that with a prospective tenant?
Carla Browne (04:33):
We talk about that there's a couple different ways that they can submit a work order. So when they have something that has gone wrong, if it's an emergency, always call the emergency line 24/7. Real person's going to answer that call. And if it's a something that is affecting them that needs to be addressed, ASAP we're going to dispatch immediately. If it's something that can wait for the next day, a doorknob has fallen off, obviously we're not sending somebody at 2:00 AM. Then we will address that through our maintenance coordinator right away. Our platforms allows for constant communication. So they're going to get a text to know exactly what's happening, who's been assigned to it. The vendor's going to reach out and we can try to keep that communication going with them.
If they call, that's one option. The other is the tenant portal. The tenant portal, they can go in and log their work order. And what's really cool about the tenant portal is that they can put pictures in. So a lot of times when they put those pictures in, we can take a look at it from the office level and say, "Oh, I know the problem that you're having." Because you can't expect, especially these tenants that have never rented before or new to Canada clients that they know everything about how a furnace works or things like that. So we can sometimes diagnose, give them a quick call, tell them a few things to try and they can get it rectified. They're happy, our investor's happy because we didn't have to send out anyone for our service call to diagnose that they just needed to change a furnace filter, for example, to get their air conditioner back up and running.
So we really talk about, like you said, clean, safe home. Those are super important to me. And that all work orders are addressed within a 24-hour period. That doesn't mean it's done. It means it's addressed. It means they're going to know when someone's coming out. And of course we have to go through that prioritization of what comes in.
Adrian Schulz (06:16):
One of the things that I find that prospective tenants are becoming more and more aware of is lease renewal terms.
Carla Browne (06:23):
Adrian Schulz (06:24):
And that's because in the purpose-built and the brand new rental market, the entry in the first year, the price of that lease tends to be a lot lower than when you're up for renewal. The beauty about more mature rental product is that the annual lease renewal terms tend to be more consistent or constant in line with especially the provinces that have it regulated. But I find that tenants want to know what does my homing or my tenancy relationship look like a year from now with your company? And I think that's also something new, is just hyperawareness of what's the renewal process and rates.
Carla Browne (07:10):
Lease renewals are really... That's such a key thing. So we often talk to them because if a tenant doesn't understand rules and regulations and an investor doesn't understand rules and regulations, all of a sudden a tenant thinks that we're going to sign a lease. And then when we renew, things could either really go up or the tenant thinks they never go up. And so understanding in your provincial regulations, first of all, when you can do an increase and what kind of timeframe needs to happen, if you're on a month to month. We do not normally sign a month to month. We really believe in trying to bring people in or trying to make this their home. So we do try to go for that year least term to begin with and special circumstances always exist. So I just want to say... I mean, it's not always.
And then when it comes to lease renewal, know your regulations there too. Like when do you have to talk to the tenant? And if you are going to be talking to the tenant, make sure if they're up for a lease renewal, you need to communicate why. Just don't send them a lease renewal for another year and bump their rent by $150 without having some kind of communication telling them why that rent is going up. And it's really key just in the time that we're in right now. And I know that we want our podcast to be timeless, but we are seeing rents go up across Canada. So it's important that if you're going to... You'd need to take advantage of that. We have to protect our investors. So the lease renewal process has to be very easy for them.
And then if they come back and if they've been with you for years and all of a sudden they want to go month to month, have the conversation why. Are they looking at possibly renting? Can you now refer them to a mortgage broker for preapproval? Can you refer them to an agent, realtor to help them through that process? Because people's lives change, but you can help them through the process is the way I always look at it.
Adrian Schulz (08:56):
Carla, we started with the Spice Girls. I feel we have an obligation to end with the Spice Girls. A dear, I guess a friend and colleague of ours, our brand manager, Sandy, she recently raised that I sometimes respond to questions in a spicy way.
Carla Browne (09:14):
Adrian Schulz (09:17):
It's a great opportunity to tell a little story of what do tenants really want. And when I was a rental tenant about, gosh, 15 plus years ago, I wanted romance.
Carla Browne (09:33):
Adrian Schulz (09:33):
Yeah. Talk about spicy. No. So there's so many places that you can meet somebody. There's the gym, there's bars, there's nightclubs, but it's amazing the opportunities that can exist in a rental community. So here's a story for you.
I'm at the gym and I meet this wonderful young lady who makes fun of me for walking on a treadmill. So I'm at a gym and I'm walking on a treadmill because I just didn't want to overdo it. And she said, "I don't think treadmills are meant for walking. You should be moving a little bit more aggressively." I said, "I'm here to meet people." Okay, that's fine. Two days later, I'm in the-
Carla Browne (10:18):
Were you really there to meet people? I just [inaudible 00:10:19].
Adrian Schulz (10:20):
I was. I was. Because I thought it was better than the bar because at the bar, you meet alcoholics, and at the gym, you meet attractive people. So now I'm on my way to church on a Sunday morning and I'm waiting for the elevator in my apartment complex. And lo and behold, walking up from the other end of the hall is the same young woman that had just made fun of me at the gym two days ago. I'm like, "Oh, hi, here we are and we're walking."
So we go down the elevator and we're having a nice chit chat. She tells me where she's going. I say where I'm going. I get out of the elevator and I thought... And this is a true story. I thought this is kind of interesting. I met her a couple of days ago at the gym and she made fun of me, which I liked. Now I meet her in my own apartment building. That's kind of neat. If she drives a Swedish car, I know she's going to become my wife. We're driving out up the ramp out of the parkade. I'm driving a Saab at the time, which I very much miss. A manual transmission for those who are wondering. And behind me, she's driving a Volvo. Well, lo and behold, we've now been married for eight years.
Carla Browne (11:41):
How did I not know this story? That's what I want to know.
Adrian Schulz (11:43):
So you can find romance in a rental and I think that that's what tenants really, really want. Now that's real property management.
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