Every day that a rental unit sits vacant is a loss of revenue that you can never fully recover, regardless of whether you eventually secure a higher rent. Here, I give you ten specific tips to help you rent your vacancy right away.
Maintain Curb Appeal
Your rental prospect makes his first impression when he drives up. If your property doesn’t look clean and attractive on the outside, the prospect often doesn’t wait to see the inside! Your chances of leasing your rental unit at a competitive market rent to a stable and financially solid rental prospect are about nil when your property doesn’t have good curb appeal. You can’t always dramatically improve the architectural look of your rental property, but you can usually control the appearance of its grounds.
Familiarity is the enemy of rental property owners. When you’re familiar with your property, you may have trouble looking at it with an independent and critical eye. Drive up to your property and continually ask yourself what looks tacky or poorly maintained. You may really have to focus, but you’ll find several items that need immediate attention. Take care of them now.
Keep the Unit in Rent-Ready Condition
Although you may eventually find a tenant willing to accept your rental unit before it’s in rent-ready condition, you can almost guarantee that the unit will be returned to you in even worse condition when that tenant vacates. Naturally, the tenant will argue if you try to take any deductions from her security deposit, and the courts will probably side with her because the unit wasn’t clean originally. Spare yourself this agony and make having a rent-ready unit that’s clean and defect-free your goal.
Distinguish your rental unit from the others out there by keeping up its professionally maintained, clean, bright and airy appearance – this noticeable difference will appeal to the best rental prospects.
Establish a Competitive Rent
If you don’t have vacancies on a regular basis, and you’re in a rental market where rents are fluctuating, setting the rental rate at the right amount can be a real challenge. Be sure to do your homework and carefully review the local rental market for rental properties that are truly comparable. If you set your rent too low, you’ll have multiple qualified applicants and can select the best one, but you won’t maximize your rental income. If the rent is too high, you’ll suffer lost rental income. The key is to set your rent at or slightly below the market rent for your area.
Offer Prospects a Rate Guarantee
They may feel comfortable with your current rent, but virtually all rental prospects are concerned about your ability to unilaterally raise their rent, unless you offer a lease. Of course, a long-term lease isn’t in your best interest because you can’t increase rent and may have trouble evicting a problem tenant.
If you know that you don’t intend to raise your tenant’s rent in the near future, offer him a rental rate guarantee for a set period of time. This move allays his fears of being hit with an unreasonable rent increase soon after moving in. It also helps you avoid getting locked into a long-term lease that may one day lead to expensive and aggravating court action.
Stay Ahead of the Technology Curve
Every day, access to technology becomes more important, so pre-wiring your rental property or offering wireless, high-speed Internet access can be a great way to distinguish your property from the competition. The four basic types of high speed Internet connections (cable, digital subscriber lines – DSL, fixed wireless and satellite) have their own advantages but some types may not be available in your area.
Owners of larger rental properties typically find that the Internet service provider (ISP) covers installation costs and offers to share in the revenues. Single-family or small rental property owners may have more trouble getting service in many areas, but may be able to get free installation with a tenant commitment to subscribe to the service for a minimum time period.
Offer Referral Fees
Often, your current tenants or your rental property neighbors can be the best sources for finding your next tenant. They may work with, go to school with or participate in activities with someone who’s looking for a new rental. So let them know that you have an upcoming vacancy and that you want to reward them for taking the time to refer a rental prospect to you. Referral fees can be an extremely cost-effective source of qualified renters. Another benefit is that most people don’t personally refer a potential tenant whom they don’t respect and trust. Referral fees thus allow tenants to make some money and have a hand in picking their own neighbors!
Accept Pets
Rental property owners who don’t accept pets eliminate nearly 50 percent of the country’s potential renters, according to the Humane Society of the United States. With the requirement to accept certain pets for tenants qualified under the Americans with Disabilities Act, many owners already find their ability to enforce “no pet” policies diminished.
So, if you can’t beat ‘em, why not join ‘em? If you establish sound pet policies, collect a larger security deposit and meet both the tenant and the pet, you’ll often find that you have an excellent, stable tenant for many years to come. For safety and insurance reasons, avoid dangerous animals or breed of dogs such as pit bulls.
Offer Move-In Gifts or Upgrades
The word FREE is one of my favorite words and one of the most powerful sales tools ever! If you want to rent your vacancy today, seriously consider offering your prospect a move-in gift or an upgrade to the rental unit. Every day your rental unit sits vacant, you’re losing money you will never see again, so you may as well sweeten the pot.
You have a choice – you can offer a move-in gift that immediately belongs to the tenant, or you can offer an upgrade to the rental unit that stays when she leaves. For example, countertop microwave ovens make great move-in gifts, whereas a built-in microwave range hood or ceiling fan is an excellent unit upgrade. If you’re planning to replace the carpet, consider giving your income tenant the option to choose among her favorite neutral carpet colors.
Contact Corporate Relocation Services
Many areas of the U.S. have a high demand for rental units for corporate employees relocating to the area. In particular, corporate relocation services have an extremely difficult time finding rental properties for families of executives requiring single-family homes with yards and plenty of storage.
These services are often willing to pay significantly above-market rents for rental units or homes on short-term leases of six to 12 months. From your perspective, the additional turnover can be worth it if the rent is enough. From the services’ perspective, your rent is much cheaper than placing their clients in extended-stay lodging.
Some corporate relocation pros will want to lease your property for multiple years with the provision that they can move in different occupants. Make sure you have very firm house rules, set a reasonable limit on the frequency of tenant turnover and require a detailed inspection upon each move.
Accept Section 8
The Housing and Urban Development Section 8 program is administered by 3,000 local public housing authorities located throughout the country. Some of those agencies aren’t easy to work with; some have maximum allowable rents that are well below market value. If these factors aren’t a problem in your area, you may find some tangible benefits in participating in the Section 8 program in that your vacancy doesn’t last long due to the sever shortage of rental units available for Section 8 tenants in many areas and the government typically pays the majority of the rent promptly each month, so you at least have that guarantee.
Robert Griswold is a hands-on property manager with more than 30 years of experience, having managed more than 800 properties representing more than 45,000 rentals. He owns and runs Griswold Real Estate Management, Inc. with offices in southern California and southern Nevada. This article is an excerpt from his book, Property Management for Dummies which is available at www.LandlordBooks.com. For more information, visit www.griswoldremgmt.com