5 Ways to Minimize Vacancy in Your Rental Properties
Minimizing vacancy in your rental property is a key element in profitability. An empty property can quickly turn your profitable investment into a financial burden. Whether you are a seasoned investor with a portfolio of properties, or you are just getting started with your first rental listing, it is essential to take a proactive and strategic approach to ensure that your properties never sit uninhabited for longer than necessary.
Price Rent Appropriately for the Market
The delicate nature of rental pricing can be mystifying; it’s more important than a ‘gut feel’. If the price is too high, your property can sit vacant for 2 months, negating any rent increase you were hoping to obtain. Do the math: Pricing just $200 higher nets you $2400 in a year. But if a $2500/mo property sits vacant just 1 month, you’ve eaten up that increase. A quality property management company will be in tune with the market and advise accordingly to limit vacancy. If you are managing your own rental property, research and compare these basic factors to what’s for rent in your area:
- Similar size properties (both in number of bedrooms/baths and square footage)
- House vs. condo (houses garner high rents)
- Location
- Amenities (parking, yard, pets, pool)
- Updates and condition
Stay in tune with your market; do not wait until a tenant is moving to begin your research. You (or your property manager) should have a feel over the year for what’s happening in the market.
Employ Tenant Retention Strategies
The best way to keep your rental properties from sitting vacant is by employing tenant retention strategies. This is not as difficult as it sounds if you respect your tenants and manage your property wisely. Keeping up with regular renovation, and maintenance requests, and addressing tenants’ concerns in a prompt and professional manner will nourish the relationship between tenants and landlord and keep your renters around longer. Responsiveness is key. Be sure your property manager has a strong reputation for tenant relations. Routine requests should be taken care of within a week, and emergency maintenance issues should always be dealt with immediately. Neglecting maintenance requests and inspections can lead to serious and costly repairs down the road and in some cases cause your property to sit vacant while the repairs are being made. If you aren’t using a property manager, you absolutely must have a team of contractors that you trust to respond quickly to your needs.
Keep Up with Showings and Applications
Once you place your rental property on the market, you will hopefully have many inquiries and applications. It is essential to respond promptly because as quickly as you are looking to fill your property, renters are just as quickly looking to find a home. They will often reach out to multiple properties at a time, and you want to touch base as soon as possible to accelerate the screening process. Be available days and evenings for showings. Try to respond in a first-come-first-serve order and keep the potential tenant in the loop as you screen and run background checks so that they know where they are in the process. If you are not responsive, they could assume you’ve selected another renter and therefore they may move on to the next prospects, leaving your property vacant longer.
Allow Pets
Approximately 72% of renters have furry companions in the United States. Opening up your property to allow pets places you in a much larger renter pool. You may opt to charge a small additional monthly fee or take an additional pet deposit as a safeguard against any possible damage left behind.
Marketing Strategies
Marketing your property is essential to avoid vacancy. The majority of renters look to the Internet for prospective homes, so it is important to have a strong online presence when looking to fill your properties. Utilizing real estate websites like Zillow or Trulia is necessary at a minimum. Hiring a property manager to take care of marketing and advertisement can also aid in keeping your property inhabited and reduce the turnover time between renters. Working with Utopia, we have a massive base of tenants that look to our own website for properties.
Be sure to provide a detailed description of the home and plenty of high-quality photographs that feature the home and what makes it special. A weak listing sets the tone that you may also be a weak landlord.
