5 Ways to Reduce Vacancy to 45 Days or Less
Here is a simple formula that summarizes how to reduce your vacancies:
Good Property Management + Proactive Owner = Reduced Vacancies
You spend a lot of time and money selecting just the right property in just the right area. You should give equal time to learning how to properly manage your property managers.
Being in business since 1997 and helping thousands of people invest in real estate has taught me many things. When there’s a vacancy, it’s not always the property manager’s fault. In fact, I would say that 9 out of 10 vacancies could have been cut in half, at the very least, if the property owner would have been more proactive. It’s hard to soften the blow when someone has gone 5 months without a tenant and they finally decide to come to us for help. So kudos to you for reading this article!
While being proactive is the most important step to reducing your vacancies, it is rather vague and not much help unless explained further. Here are simple 5 things you can do to significantly reduce your vacancies:
- Be a good record keeper: Know when your leases are going to expire. In fact, take it one step further and mark in your ELECTRONIC calendar the dates your leases expire. Then set a reminder 60 days before the lease expiration date to contact your property manager and ask them if the current tenants want to renew the lease. That kind of proactive involvement will show your property manager that you’re on the ball.
- Understand and carefully read your management agreements: Property management agreements can vary dramatically from one company to another and from one market to another on many levels. It’s important to read and understand your agreements so that you know how to handle a potential issue or situation. Keeping yourself abreast of the terms in your agreement will help you work closely with your property manager to ensure that the right procedures are being implemented such as maintenance items, rent collection, advertising, dates you will receive payment, turnaround time between tenants, walk-through inspections, etc.
- Check online to make sure your property is properly advertised: Trust but verify. It is up to YOU as the landlord to make sure your property is easy to find online. According to the Apartment Owner’s Association (AOA), roughly 80% of renters are now finding their properties online. If you can’t find your property, then potential renters definitely can’t. Make sure you can find your property easily on Zillow, Trulia, and Craiglist to name a few. In regards to the ads themselves, make sure your PM has aesthetically pleasing pictures of the front of the house and the floor plan posted. Curb appeal is a huge factor in attracting tenants. Check to make sure your ad is being renewed once a week and that all the information is accurate and persuasive to the reader.
- When vacant, call once a week: “The squeaky wheel gets the grease.” This saying holds true to the utmost regard when working with property managers during a vacancy. Email or preferably call your property manager once a week during a vacancy to ask 1) How many calls your property received, 2) How many showings were conducted, and 3) How many applications were received. Go over the information with them on the phone and find out what they are doing to find you a suitable renter. This call can be as short as 5-10 minutes, but if it means the difference of a short or long vacancy, it is time well spent. Also, keep in mind that your property manager has other properties they are trying to rent, and the owner in their ear the most is usually the one that gets their property rented the fastest. Funny how that works.
- Don’t settle for questionable tenants! Tenants with a questionable credit and/or employment history can be problematic. It’s much better to be vacant a wait just a little while longer than to have a tenant in your property that will be difficult to collect rent from the rest of the year. Good screening is the most important thing your PM can do for you. If you follow the steps above and you reach a 45 day vacancy, consider lowering your rent to be as competitive as possible.
A few other unique ideas are to remember your property manager at Christmas with a card and maybe a box of See’s candy. I like to send my tenants a $25 Home Depot gift card twice a year; once in March to buy furnace filters, weed spray, bug spray and perhaps some flowering plants for the garden then again in late November to buy a Christmas tree and Poinsettia or other things for use around the house. You can send the gift card to your property manager who will then deliver it to your tenants. Sometimes it’s these little things that make a big difference in the tenant’s length of stay.
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