As an investor, you need to account for vacancy costs, or the amount of rent you are losing when you do not have tenants living in rental homes. The longer you leave your rental investment property unoccupied, the more it might cost. Since you need to fill up these properties fast, it is important to learn not only how to find applicants quickly, but also how to keep good tenants longer.
The good news for landlords is the vacancy for rental homes has been steadily decreasing. The U.S. Department of Commerce’s Census Bureau reported rental vacancy rate decreased 0.7 percent in the second quarter of 2014 to reach 7.5 percent. These latest statistics show that demand for rentals continues to be high, resulting in the gradual decline of vacancy rates for single-family rental homes and other investment properties. While demand may be strong for single-family rental homes, investors should consider how they can still limit their expenses, including vacancy costs.
Here are ways to find tenants fast to limit your vacancy costs:
Start advertising early
Time is usually a factor of vacancy costs. Since investors lose more money the longer the property is vacant, it’s important to begin advertising the property early. At HomeUnion, Investment Location Managers look for new tenants 30 to 60 days before the current tenants move out. Once tenants have moved in, keeping them longer through excellent service could also lower the costs of having to find new tenants.
“Giving good service to tenants also keeps them in the places they are renting in the first place,” said Kevin Guerin, Supply Chain Director for the South/Southeast region at HomeUnion. “If they feel like someone listens to their needs, they stay for a longer period of time.”
Send fliers to local real estate offices
While investment property owners could choose typical advertising outlets like the newspaper or Internet, they could have better luck reaching out to tenants directly through sending fliers to local real estate offices. Sometimes, tenants might call on these offices to find out about openings for housing in their neighborhood and your flier might be the ticket to getting them to apply to occupy a rental home. In breaking down the qualities of the rental home, you should make sure to list any unique features that could attract potential tenants, which may include a great outdoor space, like covered patio or deck, or an updated kitchen that will appeal to an enthusiastic home chef.
Advertise the school district
As a growing trend among consumers, many potential tenants now want to be able to build a life around the neighborhood they live in and foster a relationship with surrounding community members. Part of this sense of community is being able to send their kids off at a good school. Investors that have carefully chosen rental homes in great school districts should highlight the district to applicants. This could make a difference in tenants’ eyes especially if they are divided between certain homes in different school districts. Marketing the home as being in one of the best school districts could sway some undecided tenants.
Put signs around other rentals
If you are advertising a rental home, it’s important to get your message out there as much as you can. This can even be done by putting up signs around rentals that are already occupied by someone else. Once someone in the neighborhood sees it, they might tell their other friends or family members. Word of mouth can be a simple yet effective way to fill a rental property.
Although it is the goal for many investors to get their investment properties occupied as quickly as they can, they must be careful not to rush the process too much or else they may end up with tenants who may cost them in the long run. When deciding who will occupy a space, you should still go through the regular channels of reviewing potential tenants and their applications. In your haste, do not neglect to perform a credit or background check. Both of these measures are critical to ensuring that tenants have the sufficient income needed to pay their monthly rent each month and do not have excessive debts that may result in them struggling to come up with the rent.
While it can take a great deal of time and cost to manage a rental home, especially in a remote area, HomeUnion clients can rest easy. They know that owning an investment property with HomeUnion means the tasks of daily property management are taken care of. Learn how at HomeUnion.