Tenant vacancy racks up costs by leaving you out of pocket for rental income and forcing you to cover the mortgage out of your own pocket. It wreaks havoc on your wallet, your peace of mind, and your very lifestyle itself. As a landlord, it is important to mitigate the disaster that is the tenant vacancy but it is difficult to know where to start.
That’s why we at RenterEvaluation took the time to sit down and list out the basic tenets of filling your empty unit. Whether you are a property manager with 100’s of units and want a quick refresher as more vacancies are available, or you a first-time landlord looking to stave off what could be a fatal blow to your ambitions, we have you covered. Kick back, put your feet up, and breathe easy.
It is an easier problem to solve than you think.
Yeah, price. Trying to fill a rental unit can be very difficult. Even when you think you have done everything right, a stubborn unit may still remain empty, devoid of tenants, a money-sucking abyss of misery.
Well, while there’s certainly a nearly endless variety of factors that could be causing the vacancy, it’s important to remember the very basics: price. Look at your rental rate and compare it to others in the neighborhood to see if you are priced too high. No matter how great you may think your rental property is, or how sweet of a deal—if it’s out of market pricing, it’s out the market, period.
The very first thing prospective tenants evaluate (ha. Ha. no pun intended) in even the most basic cost-benefit analysis of seeking out a property is, surprise surprise, PRICE. Here’s what to keep in mind when you price your property (through the eyes of a tenant, not the eyes of positive cash flow):
Location, Location, Location
If it has been said once, it has been said a thousand times. LOCATION, LOCATION, LOCATION. The location of your property plays an enormous role in how you can price your property. On the beach? Great! Price it higher. In the middle of the slums? Price accordingly. Look at other rentals in your neighborhood on websites like Zillow and Trulia to get a basic idea of what landlords around you are charging.
Condition of Property
Is brand new? Awesome! Built-in 1911 but recently renovated? Say so! Built in the ’50s but neglected and it shows? Recognize it and price appropriately. If your property is less than ideal, and wear and tear have noticeably taken their toll, it may be time to put some money into renovations so you can rent it out consistently with low tenant turnover. Rental property is, after all, an investment.
If you provide fantastic amenities that give you an edge over your competitors, feel free to add them to your rental rate, but within reason. If you are out pricing your competitors by over a hundred dollars simply because you have USB outlets, you are doing yourself a disservice and ultimately losing money because of it.
Plain and simple: if no one knows your property exists, how will they rent it out from you? We actually put together this nifty infographic on how to market your rentals effectively in 30 minutes or less. However, if even thirty minutes is more time than you want to take to market your rental, let us give you a real basic breakdown right here:
–Post to Craigslist
-Distribute to Facebook
-Distribute to Instagram
That seriously is all it really takes. That said, you should also post to Trulia and Zillow, talk to your friends in person, and your coworkers if you don’t mind combining your landlording with your day job, (unless landlording is your day-job, in which case you should be putting a lot more effort into marketing than what is mentioned above).
Most people like to do business with friends, and as long as you already have a significant social media presence, you can probably just pull from that pool of friends to market your rental too. Regardless f your social media involvement, however, is Craigslist. An absolute ton of possible tenants on the prowl peruse Craigslist at both their leisure and actively looking for their next residence. Make sure you get seen.
How tight is your rental policy? If your price is not outrageous and your marketing is airtight, then it’s likely your guidelines won who should apply or who can live in your unit. Sometimes policies need to be relaxed, especially so if you are having trouble finding a tenant. We at RenterEvaluation preach tenant screening to find the right tenant, and so long as they pass our relatively stringent guidelines, they should be a good tenant.
Of course, other policies like are pets allowed or not, is up to your discretion. However, be warned: if all your neighbors allow pets and you don’t, plus your property is not in as good of shape, that could very well be the reason you are repelling the very tenants you need to attract.
Another clause in your policy to consider…
Length of Lease Agreement
Maybe your competitors all allow one-year leases and you inflexibly require a two-year agreement. In a college town, for instance, this could play an enormous role in whether or not a student wants to rent out the property from you. With students, and the younger population in general (especially renters), flexibility is important. They do not want to be tied down to one place and locked into a financial, agreement that will come back to haunt them as they grow older. This simple solution is to change our rental agreement to a one-year lease.
The main reason for tenant vacancies boils down to differences between what you offer and what your competition offers. Your main goal should be to look better than your competition. If you can do just that, you can eliminate vacancies nearly entirely.
In a word, tenant vacancy is the worst. Say adios to lost income and hello to reliability, lucrative streams of mula, and a stable financial bedrock.
This all said, do not get desperate. Bad tenants lead to worse things than tenant vacancy, like tenant eviction, which costs exponentially more than leaving the unit empty for a month or two. When you see the applications rolling, use TenantEvalaution and screen tenants properly with credit scores, background checks, and even rental histories. It’s easy. It’s simple. Most of all, it’s FREE. Seriously.