Vacancies take a heavy toll on your cash flow as a property investor. For each month a property sits vacant, you have bills to pay without any income, and the property’s condition may suffer as well. Without tenants to care for (and pay for) it, a vacant property will likely require more maintenance – something that can break the bank without any rental income.
Wise property owners make strategic moves to reduce vacancy times and keep their properties filled with responsible tenants. Some of the strategies are very simply and can be implemented right away. Others may take some time or require changes in the way you operate. Let’s take a look.
1. Price Your Rental Property Appropriately
This may be the simplest and most effective way to reduce vacancy rates. A property that is priced too high will get fewer applicants. People shop around looking for the best property within their budgets, and if your property is priced too high, it will pale in comparison to the competition.
You want to be careful about pricing too low as well, however. When you price it too low you may be overwhelmed with applicants, some of whom will not be able to afford your place, even at a too-low rate. If you need to rent your place quickly, price it just under average for similar properties in your area. A great property management company is your best bet in deciding on your pricing strategy.
2. Improve Your Marketing
Wherever you post your rental property online, make sure you maximise your marketing power. An effectively marketed property will spend less time vacant than one with poor marketing.
Instead of throwing a simple, two-line description on the Internet, talk extensively about the amenities and benefits of living in the property. Mention that it’s close to parking, shops, and public transportation. Take high-quality pictures of your rental property looking its best, and include pictures of each room as well as the exterior.
3. Look for Long-Term Tenants
Not eager to go through the turnover process again in 12 months? Screen tenants to find out about their future moving plans.
Some people just don’t know how long they’re going to stay, but many know if they’re looking for a temporary holding place or a longer term residence. Employment can be a good indicator for longevity at a rental property. People who like their jobs and have been employed at the same place for a long time are more likely to stay in one place than people who are looking for their next big break.
4. Work Hard to Keep Good Tenants
If your investment property is currently rented to good tenants, do all you can to keep them there. This includes responding quickly to requests for repairs and making improvements to the property periodically.
Offer incentives or rewards for taking care of the property, and be as responsive as possible. Be the best landlord they’ve ever had, and they won’t want to leave.
5. Get Referrals If They Do Leave
Even when you’re an amazing landlord, tenants sometimes have to move on. When this happens, ask them for referrals, especially if they’ve been great tenants. They may have friends in the area, and they may know of people looking for a great place to move into.
Word-of-mouth marketing is often as effective as traditional forms of marketing. You may also want to let neighbors know that you’re looking for new tenants. Neighbors have a vested interest in making sure responsible people move in, and they may have friends they’d love to have next door.
6. Be Strategic with Your Lease Dates
Some times of year are more attractive than others for moving, and if your tenants vacate your property in the middle of the school year, you may have a difficult time finding replacements.
To avoid this problem, structure your leases so tenants will move out during the times of year that are easiest to find new renters. If you have to start a new lease at a disadvantageous time of year, consider signing a longer or shorter lease to get you on track with the best moving times of year.
For more information about avoiding vacant investment properties, or to discuss any other property investment topic, reach out to us at Full Financial Services.