Intelligent leasing is the foundation of a quality ownership experience. The apartment building owner with an effective leasing strategy reaps tremendous benefits that his short-sighted or uninformed competitors are often missing out on. You can enjoy having exceptional tenants, achieve the highest possible rents, have a virtually non-existent vacancy factor, and own the most intelligently positioned asset on the block if you want to. Quality leasing is commonly an underappreciated skill that too many owners do not fully understand. If you want to increase the quality of your ownership experience, start by improving your leasing methods.
As a starting-off point, do not assume that you know everything there is to know about leasing a vacant apartment. Rather, assume that you have much to learn and that your leasing methods can and should improve. Very few people became great by resting on their laurels. We can all benefit from learning something new. Advances in technology and the creation and development of the Internet have changed the game, and owners are either embracing that change or being left behind. Please do not make the mistake of turning your back on the new resources that are available to you.
Leasing is a skill. Like other skills, if you want to be great at it you must invest / possess the following four things: Time, Effort, Ability, and Passion. A healthy dose of all four are required in order to reap the benefits of exceptional leasing. If you know that you are not willing or able to personally do what it takes, then find someone who is willing to do it for you. Be honest with yourself and proceed accordingly. There is no shortage of real estate professionals that are eager to work hard for you. If one of them is qualified for the job, let them do the work that you do not want to do yourself. Outsourcing a responsibility to a professional is often a very wise move. Most owners outsource cleaning, painting, general maintenance and a long list of other responsibilities. Many owners could do those things themselves, but they do not want to invest the time or the effort. Outsourcing leasing can be even more beneficial.
I have worked with hundreds of property owners over the last few years. I have learned a great deal from them, and hope some of them have learned a few things from me. I have always found it unfortunate that so many owners do not maximize the value of their properties through intelligent leasing methods. The savvy apartment building players are capitalizing on the miscues of the owners that have failed to manage their assets properly. Every intelligent buyer is looking for buildings with upside. Significant upside is present in the overwhelming majority of apartment buildings primarily because rental amounts are foolishly not maximized by an owner. Do yourself a favor, and do not allow your property to have anything less than exceptional tenants paying the highest possible rents. Challenge yourself to do it, or find someone who is both eager and capable of doing it for you.
The leasing process should begin the moment a tenant gives their 30 day’s notice — not after they move out. If, on March 1st, your tenant informs you that they are moving out on March 31st, you have work to do right away. Shoot the unit immediately. Take quality still pictures and shoot a video tour. You can buy a quality digital camera for $200 that will do an excellent job for many years. Build your legal right to show a vacancy during a tenant’s final 30 days into your lease agreements. Strive to maintain a positive relationship with your tenants so that they are eager to accommodate your leasing efforts during their final 30 days. When appropriate, utilize a small financial incentive so that your tenants properly assist you in the leasing process. Many of our clients have tremendous success offering their exiting tenants a small bonus if the vacancy is leased to new tenants during their final 30 days. This financial incentive will turn the exiting tenant into a useful ally. The tenant will keep the unit tidy, be friendly during viewings, and speak highly of you to visiting tenants. This pre-leasing blue-print can allow for a nearly seamless transition from exiting tenant to new tenant.
Extensive online marketing is the only way to expose your vacancy to thousands of interested renters. If a For Rent sign at your property is your primary advertising resource, you are missing out. Dozens of free web-sites exist that will allow you to showcase your pictures and video tours. Allow prospective tenants to get a good look at your rental online. Do not waste your time physically showing vacancies unnecessarily. Your time is valuable; extend yourself the courtesy of only showing to tenants that have been properly exposed to the unit online.
Do not rent to applicants that are not well qualified. If you are following the steps outlined above, you will have a steady stream of interested tenants and will find someone that is right for you. The last thing you want is to go through the eviction process. Avoid that nightmare scenario by only renting to someone with quality references, verifiable income that is three times the monthly rental amount, and strong credit.
You worked very hard to own quality income producing property. Your current portfolio is likely the result of decades or even generations of hard work. You deserve well qualified tenants paying top dollar for your quality rentals. You can achieve exactly that if you make the commitment to do so. Make the effort to improve your leasing methods, and good things will come your way.
Alex Moran is the founder of Pacific Listings which provides full service leasing assistance to Los Angeles area apartment building owners. For more information, please call (323) 303- 3565.