Successful investment properties are those that generate a high income for their owners. The best way to generate income is to have all the units in your building occupied, resulting in a low vacancy rate.
If your vacancy levels remain high for a long time, you’ll end up losing money. There are many different factors that can lead to high vacancy rates just as there are specific things that can be done to lower them.
What You Can Do to Lower Vacancy Levels
Here are five simple ways to lower your vacancy rates:
- Charge the right rent – Have a look at online ads for other apartment buildings in your area. If you have been having a hard time finding people to stay with you long-term, it could be possible that you are overcharging. Correcting this problem by even $50 per month can have an immediate and noticeable impact on vacancies.
- Offer rental incentives – This tip could mean something as simple as offering a discounted month of rent for signing an extended lease. Even a few dollars a month could be enough to encourage someone to agree to a long-term commitment. Another way to entice tenants is to offer free or partially free utilities such as water, electricity, cable, and internet. Check with your property manager to see what an effective incentive for your building location can be. Some incentives work in some areas, but not in others.
- Tidy up – Think of it in these terms: where would you want to live, somewhere nice and neat, or a place that looks like it needs spring cleanup throughout the year? If the common areas of your rental are not nicely maintained, it will give people a horrible first impression and likely scare them away.
- Advertise your rentals – This is a major factor in renting out your units. Keep in mind technology now plays a huge factor in finding tenants. If you are advertising online then you are headed in the right direction, but if you are still relying solely on print and newspaper, you may want to try another technique. Try a mixture of both if you’re unwillingly to give up on one method.
- Don’t delay repairs – Although a simple concept, the nature of property management is that things will go wrong at the least opportune times, making it very tempting to put things off. This procrastination will only lead to a snowballing effect in which the end result is a massive bill all at once. Additionally, repairs can save you money in other ways (like installing new windows to save on heating).
Creating a successful rental property requires strategic business decisions. Channel your inner tenant and think of what you would want in a rental building.
Thinking in this state of mind will give you ideas as to how to lower your vacancy rate. By keeping areas tidy, vigorously advertising, repairing quickly, charging appropriately, and offering incentives, your property will be successful in no time.