A Landlord's Guide to Reducing Vacancy Rates
Renters Warehouse Blog
A Landlord's Guide to Reducing Vacancy Rates
It’s the bane of every landlord’s existence: vacancies.
If you’ve got a property sitting empty, then you know how frustrating it can be. There are few things worse than an empty rental, just sitting there collecting dust –especially if this is a regular occurrence, and you find that you’re often waiting weeks –or longer to get new tenants in.
For landlords, vacancies mean lost money as the property sits empty, and extra time spent advertising and screening new applicants. Not only that, but vacant properties can also be something of a liability as well, and more of a target for vandalism and break-ins.
As frustrating as vacancies can be though, having unqualified tenants in your rental is a prospect that’s even worse. Filling vacancies should never come at the cost of compromising your tenant screening process. Lowering your standards means that you could end up with an unqualified tenant in your home, which could mean costly problems down the road –like nonpayment of rent, a broken lease agreement, and even an eventual eviction.
The good news is that there’s a lot that you can do to reduce your vacancy rates, and when you do have a vacancy –to shorten the time in-between tenants, without having to sacrifice your standards. Let’s take a look now.
Know What Your Tenants Want
One of the first steps toward longer tenancies is to keep your current tenants happy –encouraging them to stay put longer.
So what do your tenants want? While that varies from tenant to tenant there are a few things that tend tenants tend to consistently appreciate:
- According to the 2017 American Renters Survey by Buildium, 59% of tenants surveyed would like to have the option to pay rent online
- 44% would pay more for high-speed internet
- 45% said they would pay more to have a pet
- 58% would pay more for on-site laundry
As a general guideline, anything you can do to simplify a process for your tenant or offer them convenience in some way is going to be appreciated.
Opt for a Longer Tenancy Agreement
Another tip is to encourage your tenants to sign a longer tenancy agreement of at least two years, instead of operating on a month-to-month rental agreement. Keep in mind though, that longer tenancy agreements aren’t without their risks, namely if something goes wrong, an eviction can be a bit more challenging. For this reason, it may be best to offer longer tenancies to existing tenants when their rental agreement is up for renewal.
Make Timely Repairs
One of the best ways to keep your tenants happy is by making repairs in a timely manner. If there is a delay with a repair, get in touch with your tenants as soon as possible to update them on what’s happening. While repairs often come at the most inconvenient times, delaying them is not going to help anyone in the long run. As a landlord, keep in mind that you’re responsible for keeping your rental in good, habitable condition, and that includes making repairs and performing maintenance. Keeping up with current with repairs and keeping your tenants in the loop can save them from a world of frustration, and a stress-free experience could mean they’ll be open to renewing their lease when it’s up for renewal.
Improve the Property’s Curb Appeal
A little TLC to your property’s exterior can go a long way if you are looking to find new tenants. The outside is the first thing would-be tenants will see when they drive by or view your property online. And as the old saying goes, first impressions matter! Make yours count by having a good clean up to get the exterior in good shape. Prune overgrown trees, edge the walkways, and keep the grass cut. If it’s been a while, consider doing some basic landscaping to spruce up the space a bit more. Investing in some sturdy shrubs or low-maintenance bushes can help to enhance the outdoor space, and a few pots of annuals like pansies or zinnias outside the front door can help to make the front entrance look inviting as well. Finally, if they’re showing signs of wear or damage –it may be time to update the exterior lighting fixtures and the house numbers or invest in a new doormat. Your rental will instantly look better, and generate more interest.
Choose Upgrades Wisely
Upgrades are often viewed by landlords as an unnecessary expense, but sometimes they can pay off. The right upgrades can add value to a property –and make it more attractive to renters –helping it to rent more quickly and in some cases, increasing its rental value.
Just remember to choose your upgrades wisely. As a general guideline, most upgrades should be done in keeping with other, similar properties in the surrounding area. This is because tenants in these areas will expect amenities and features that are on par with other, similar properties. Plus, the values of the neighboring homes will have an impact on your property. This means that if none of the other homes have Jacuzzis, it’s unlikely that a Jacuzzi is a feature that your tenants will be willing to pay more for. When it comes to upgrades, it’s always a good idea to consider upgrading things as they wear out with durable and more stylish alternatives. Durable flooring –like tile or even hardwearing vinyl (as opposed to lower-quality alternatives) is a good example of an upgrade that’ll help your property to appeal to tenants. It’ll also help to save you money in the long run as well since you won’t need to replace it every five years. Likewise, consider updating old appliances as they wear out to black or stainless steel alternatives –the cost is marginally more, but they tend to look better than white. At a minimum you should always look to update worn our outdated fixtures, damaged hardware, and leaky faucets or running toilets. Make sure your rental is cleaned, repaired, and the paint touched up in between tenants as well.
Making upgrades is an easy way to keep existing tenants happy, and draw in new tenants who are looking for a rental property that’s maintained at a higher standard.
Create Good Ads
Good, eye-catching ads can help to generate significant interest in your rental, giving you a wider pool of applicants to choose from. If you’re skilled with a camera, consider snapping your photos when the property’s empty to capture it at its best. Or, better yet, hire a professional to come in and take photos for you. You can keep these professional photos on file and use them every time there’s a vacancy. When it comes to creating good ads, try to think about features that your prospective tenants might be interested in, and highlight them in your listing. If your rental has granite counters, wood flooring, and new appliances –mention it in your ad. Other in-demand features worth calling attention to include a garage, good-sized bedrooms, and storage space.
Know the Market
As they say, you don’t set the rents, the market does. If you’re hoping to rent your property quickly, it’s important to price your rental carefully –in line with what other, similar properties are going for. A rental that’s priced too high will sit empty for longer, and experience more vacancies. For this reason, make sure you do your homework and try to assess the rental value of other properties nearby. Head over to Zillow and Trulia and see what other rentals are renting for. Remember, vacancies cost too, so setting your rent in line with what the market dictates will help you to keep yours low.
Check-In With Your Tenants Before the Lease Is Up
Another great way to help reduce vacancy time is to check in with your tenants before their lease is up. Ideally, you’ll want to do this three months ahead of time. This will give you a good chance to gauge whether they’d like to renew their lease or whether you’ll need to start looking for a new tenant.
Consider Offering Incentives
If you have a great tenant that you’d like to keep longer, you might consider offering incentives to encourage them to stay longer. Offering to keep their rent the same –or slightly lower if they opt into an extended tenancy is one idea, or consider giving them $200 off their rent for a month as a thank you. A month of lost rent will cost you more than that, so it may be worth considering these incentives to keep a good tenant in place longer.
Have Your Tenants Help You Find Your Next Tenant
If you do discover that your tenants are planning to leave, consider offering them an incentive if they find a new renter for you. Even offering $100 for a lead that turns into a tenant is often enough to motivate your tenants to pass the word on.
Consider Hiring a Property Manager
If you have found your rental to have an unusually high vacancy rate, you might consider hiring a property manager. Not only will a property manager be able to advise you on a competitive price for your rental, but they’ll also be able to help with upgrades and repairs that should be done as well. A good property manager will also be able to fill vacancies faster, as they’ll know how to generate interest for your property. They’ll also be able to handle tenant screening, helping to ensure that only qualified applicants gain access to your home, reducing the chance of problems and even a potential eviction down the road.
On the fence about a property manager? At Renters Warehouse, we start by assessing your rental property’s value to show you how you can price it more competitively. Get started with a FREE rental price analysis today.
Finally, it costs nothing, but a little kindness can go a long way. This doesn’t mean letting your tenants pay rent late, or allowing them to break the lease, but it does mean treating them with respect. Remember: your tenants are your valued customers, without them, you wouldn’t be in business at all. The rental is your property, but to them, it is their home –so try to keep their perspective in mind, treat them well, and be professional yet understanding. At the end of the day, a little kindness is always the best policy and can help to keep your tenants happy and in place for longer.
Keep in mind that every property is different and what works in one neighborhood, might not work as well in another. It’s important to know your neighborhood, and your tenants, and work with what you have to make the most of it. Consider trying out one or two of the above suggestions to see what works and what doesn’t. If you’re short on time or trying to manage multiple rentals or properties that are out of town, then enlist the help of a good property manager.
With the right approach, managing rentals doesn’t have to be stressful –instead, it should be an enjoyable, profitable experience. If you’re finding the opposite is true, there are options available that can help. Take advantage of them. Your future self –and your rental portfolio will thank you.
At Renters Warehouse, we’re all about making life easier for landlords. From portfolio management services that can help you to maximize your returns –to tools that can help you find, or sell your rental properties –to property management services, we have you covered. Learn more today!