Vacancy is often the most costly aspect of real estate investing. It is hard to make money without cash flow. We’re going to take a look at ways to reduce vacancies and vacant time periods, thus increasing your income. Below are 7 ways to keep tenants in and vacancy down.
Way #1. Know your market.
Neighborhoods are not created equal. As an investor you need to know what areas are viable rental markets. If you don’t know, hire someone who does. Hopefully, you do this before you buy. Location is paramount. You want an area where the nearby job market is strong. Good mass transit and short commute times are important for many. If your home is family friendly, quality schools will be a draw. We have an entire post that discusses how to choose rental property… take a look at it.
WAY #2. Price it Right
You are in a competitive business and pricing matters. Many markets have low-priced bank-owned homes flooding the market making it possible for some landlords to offer low rents. Update your market analysis to determine what the current rent rates are for a property like yours. Click here to read our post on how to determine rental rates.
WAY #3. Longer Lease Terms
Naturally, the longer the lease, the lower the vacancy rate over time. Many tenants are afraid of committing to long leases. However, there are ways you can encourage them to take the plunge. You may want to reduced rent for longer term leases. As a landlord you can afford to be a bit generous when you consider the cost of a one year verses a multi-year tenant. See Way #7 for more on this topic.
WAY #4 Be Quick To Show & Lease Your Home
Often tenants wait until the last minute to make a decision. They often need to see the home now and get a lease signed yesterday. You need to have all the leasing tools in place and ready to go when a prospective tenant shows up. You might have to rearrange your schedule to show the home quickly. Have the rental application with you and all other necessary forms. What ever system you use to qualify your tenant, make sure it is quick as well as complete. Keep in touch and be encouraging.
WAY #5 Have A Marketing Plan In Place And In A Manner That Helps Tenants Find You.
How are tenants finding your home? The internet is great for tenants who have computers. However, many lower income applicants do not have internet access or the knowledge to search on-line. You need to know your market and advertise appropriately. Bottom line, create a winning advertising and marketing plan that is ready to go when a vacancy occurs.
WAY #6 Be Quick and Meticulous With Your Turn Around
In another post we talked about having your team in place. This is critical during vacant times. The moment your tenant moves out, you need your cleaning crew, handyman and other vendors getting the place ready to rent... every vacant day cost you money. When you do your move-out inspection make a list of what needs to be done and move on it ASAP. Do a great job too… there is a lot of competition out there.
WAY #7 Do Things That Make Your Tenant Want To Stay For Years
We can’t tell you the number of stories we hear about landlords doing things that create unhappy renters. When a tenant calls for a repair, get it done rapidly. Failure to fix a leaky faucet may lose you a tenant and cost you hundreds or thousands in lost rent. Call your tenant once a month to see if there are any problems or issues that need attention and make the call in the middle of the month so they know you are not calling about rent. Check with the tenant a couple months before the end of the contract and try to negotiate a new lease. If they are great tenants, offer an incentive to stay. Some landlords send movie tickets, or gift cards every few months with a note saying thanks for being such good tenants. Paying to have the carpets cleaned every 6 months helps both you and your renter. We all like to be recognized and appreciated. Simple acts of kindness can create long term tenancy.
As always, we hope this article has been helpful. If you have questions, please know we are here for you.
Ron Urban & Gene Urban
The Urban Team at Realty Executives
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