Vacant rental properties are the number one thing that property investors fight to avoid. Nobody purchases a rental property just to get stuck paying the mortgage and utilities in full, plus there’s the risk of vandalism and other issues with having a house sitting unoccupied. Before you become a landlord, it’s beneficial to think hard about what you can do to reduce the number of vacancies your property will have. The National Association of Realtors claims that vacancy rates are falling an average of 1 percent per year, just as rent is rising. So it’s still a landlord’s market, as long as you are prepared.
1. Research Thoroughly
The easiest possibly way to reduce vacancies is to make sure you purchase the right property. Not only should you be asking every possible question about the condition and history of a house before you buy it, you should have a thorough understanding of the neighborhood. What are the crime rates? How safe is it at night? What is the proximity to the nearest school? What kind of jobs are available in the area? How far is it from grocery stores, movie theaters, or shopping malls? You also have to do your research when it comes to the market prices in that area, not just guess. If your rent is unreasonably higher than the other rental properties in that neighborhood, tenants will be unlikely to stick around very long.
2. Be Understanding of Financial Situations
When you’re interviewing perspective tenants, you might consider lessening your credit requirements. Since the recession, virtually all renters have bad credit, and it may no longer be the best way to tell how responsible they’ll be when it comes to paying their rent. If you wait for an applicant to come along with spotless credit, you might be sitting on a vacant property for a while. It also pays to be understanding when a tenant is late on their rent, as long as they communicate with you about the situation. It’s not worth losing a long-term tenant over a couple of late payments, especially when you know they’re trying to pay you on time. Sure, there are many chronically late and irresponsible tenants which will cause you to consider eviction for various reasons, but you may need to lower your standards slightly to keep your property occupied.
3. Make Smart Improvements
Don’t reserve your concern for the upkeep of your rental property to when it is vacant or when something is in serious need of repair. Make sure your tenants receive regular service from gardeners, exterminators, and handymen. Replace old appliances, upgrade heating and cooling systems, and take on small projects like redoing bathroom tile or sprucing up the home’s exterior. This will increase your property value in the long run and let your tenants know you are invested in giving them a nice home. However, don’t bombard them with workers coming in and out or constant surprise visits. Let them be involved in the process by asking them what they’d like to see in the home, and then let them know your plans.
Providing a great property in the right neighborhood is the first step to reducing vacancies. The second step is getting to know your tenants. If you can become a friend to the people you rent to and not a tyrant, they will be more inspired to stick with you. After all, in the ideal landlord-tenant relationship, the house remains a home and everybody wins.
Yakezie Carnival at Family Money Values