Avoid Vacancy Rates in Your Investment Property
No landlord wants to hear the v-word…vacancy. Whenever a quality, on-time paying tenant leaves your rental property it signals an unpaid mortgage, marketing costs, and stress. By focusing on tenant satisfaction through their physical space, lease economics, and your own behavior as a landlord you may be able to decrease vacancies over the long term. Here are some quick tips to consider.
The Main Thing You Can Do To Avoid Vacancy Rates is to Make Prompt Repairs
It’s inevitable that your cell phone will ring in the middle of the night with a tenant repair request. While inconvenient, how quickly and efficiently you meet the needs of your tenant during their time of need is a critical factor to their satisfaction. From leaky faucets to major furnace replacements, making prompt repairs will keep your rental unit operating at its highest and in a safe condition.
Want to avoid vacancy rates? Keep your place clean! Tenants want to live in clean spaces. You do not have to spend a lot of money on high-end finishes but fresh, well-maintained flooring, paint, and fixtures are a must in order to avoid vacancies. If your unit has communal spaces be sure to maintain hallways, laundry areas, and mailrooms. Don’t hesitate to ask your tenants to govern each other and set basic cleaning duties as well.
Avoiding vacancies means getting ahead of the competition. Consider small, cost-effective amenities you can offer that other area rentals are not. A coin-operated washer and dryer unit on-site, perhaps? Or, maybe free Wi-Fi within each unit? Simple in-unit upgrades are also very desirable like dishwashers and garbage disposals. All of these suggestions have small price tags with high tenant amenity value that can set you apart from the rest of the market and decrease vacancy rates.
Beat Your Market
Naturally, your goal is to own a profitable investment property but sometimes avoiding vacancies means losing some profit in the short term to gain it back over the long term. Consider offering paid utilities if other rental properties in the area are not. Many valuable tenants will view this as a huge benefit to choosing your unit. Even a small paid sewage bill will entice a tenant to sign a lease.
Another option is to build a free month’s rent into your lease to incentivize tenants to sign. While this may seem counterproductive at first, you will more than likely get a higher number of applications and the ability to be selective with your placements. You can also reverse this offer and give a vacating tenant a free month to sign a new lease. Keep in mind, that one month’s rent is less expensive than the costs surrounding a vacancy.
Connect with Your Tenants
Getting to know your tenants on a human level does not make you a weak landlord. Open communication and friendly interactions create an easy relationship. Some simple ways to create rapport with your tenants are to send cards on special occasions and welcome them with a move-in gift basket. Try to create ways to get to know them so your communication together is not totally about rent, property, and lease issues. Doing so will make it more difficult for them to leave your property because they like you.
Develop Your Own Vacancy Strategy
While there are many opportunities to take care of your tenants, this list is just a start. With some creativity and a lot of in-depth market knowledge, you will discover what works best for you as a landlord. While vacancy rates are a reality when investing in real estate, they should not be long-term and can be overcome with proven strategies.