As a property investor your tenant is your client
As a property investor, it’s important to consider that in many ways you’re running a business. The product is the property you own, and the customer is your tenant. So, how do you go about appealing to the right tenant and ensuring your product meets their needs?
Know your customer
As the saying goes, the purpose of any business is to create and keep a customer, and it’s no different when it comes to property investing. The first step to creating and keeping a tenant is to really understand who they might be. Based on the location you’re considering investing in, ask yourself are they most likely to be a family, single, a couple? What are they likely to earn? Where are they likely to work? The Australian Bureau of Statistics is a great place to start when it comes to understanding suburb demographics, but there’s a wealth of other information you should seek out as well. When you know who your client is, you can create or source a product (aka property) that really suits their needs – whether that’s a house with three bedrooms and a fenced back yard or a unit with city views and an onsite pool and gym.
Addressing their pain points
Every customer has pain points that your product will help them solve. In the case of tenants, pain points might include:
- Proximity to where they work
- Access to public transport and shopping
- Enough room for the whole family
- Garage space to keep their car off the street
- A fenced backyard for the family pet
- An entertaining area which they can enjoy with friends
In property terms, addressing these pain points is about looking for the right features and benefits that a property offers in a bid to appeal to and accommodate the most likely prospective tenant in your area.
Property investor customer service commitments
Once you know your ideal customer (aka tenant) and the pain points they have (aka features and benefits they’re looking for) it’s about keeping them satisfied. In business, it’s a well-established fact that retaining a customer costs far less than creating a new one – and again this is true when it comes to property. Long-term tenants are far more valuable than tenants who only stay for a single lease period. So, as a property investor, how do you keep your customer happy?
Well a) you value them and b) you ensure your product continues to service their needs.
And this is where repairs and maintenance come in. But as a property investor, things start to get a little interesting at this point.
A quality product
Repairs and maintenance can soon add up if a property is older. And the bottom line is as a landlord you have a legal obligation to ensure that your property is in safe, liveable condition throughout the duration of any tenancy. That means honouring your customer service commitment can soon eat into your income and business bottom line. And that’s where a property investment strategy with a focus on new-builds might likely be better, reducing the need for the maintenance and repair of aging items, while also maximising the amount you can claim on depreciation when it comes to tax time.
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Property Friends is a specialist Property Investment Strategist that provides solutions for people aspiring to financial independence, choices in retirement, or leaving a legacy. www.propertyfriends.com.au (03) 9758 5331