Reduce your vacancy rates to zero
Both from experience, and from listening to the concerns of other real estate colleagues, keeping rental properties occupied can be a headache. It can prove difficult to find tenants for a rental property—and finding good tenants that pay their rent on time, don’t damage the property, and don’t break a lease before it’s time are rare.
Making your own mortgage payments, utilities costs, fear of break-ins, vandalism, strenuous maintenance, and landscaping are just a few of the worries and costs associated with a rental property that remains vacant for a few months. It can be disastrous on your personal finances and leave you with no options but bad, irresponsible tenants if you need to take whatever you can get.
In order to reduce your vacancy rates to zero, I’d like to share with you my four tips for preventing rental property vacancies…
1. Buy in a prime location
Obviously location has a great deal to do with if a property is rented or not. I’ve seen immaculately, well priced rentals stay empty for months due to a bad location. And I’ve seen poorly kept, pricy units in high demand due to prime location. Obviously, certain areas in your city are better for investing then others due to factors like the safety of the neighborhood, closeness to the downtown core or universities, and other factors. In order to discover the desirability of areas in your town do the following research before you buy in the area:
• Scan rental ads to see prices (higher priced are typically in better locations) in the area
• Speak with realtor and property manager colleagues with experience in real estate investment
• Look at other rentals on the street—are there a lot with high or low vacancy rates?
Ok, so now you have a rental and need tenants so you’ll have to advertise your rental property. The best way to do so is to think like a tenant—not a landlord by focusing on advertising that:
• Appears in mediums that your possible tenant will read—i.e., student housing boards, grocery store and community bulletins
• If you’re rental property is located in a neighborhood with a lot of ethnicities, try advertising in the local new citizen or new arrival publications in the prominent language
• If renting to students, use mediums like Facebook and Twitter to advertise your rental
3. Keep the rent reasonable
In order to price your rental unit accordingly, you want to research similar rental properties, yes, but also get out and actually look at other rental properties in the area that are similar to yours as far as updates, amenities, size, proximity to core areas, and more. Remember, you need to maintain a competitive price, but also reap a decent return on your investment for it to be worth your time, money, and effort.
4. Offer lengthy leases
It’s a basic fact that rentals that offer a long-term lease turnover tenants less frequently. So offer leases that start at minimum one year to two years. You can even offer cheaper rent or attractive incentives (i.e., utilities included, free internet or cable television). Remember, the longer you can get a tenant to commit to your location, the longer they stay and develop a bond with the neighborhood and the residence. So chances of renewing a lease are much better.