A successful apartment has the majority of its units filled. However, no apartment or condo is immune to vacancy; it plagues multi-family buildings everywhere. The trick is getting it down to a minimum. When you have high tenant turnover, you lose money. The longer you can keep tenants, the more money your apartment can make.
When you have a vacant unit, there are several costs incurred. It may need repairs and maintenance, it may have been left filthy, and then you’ll have to advertise it when it’s ready to be occupied again. All those costs will add up the longer it sits vacant.
However, you don’t want to accept the first tenant who applies, either. In a rush to get the unit filled, you can’t lower your standards. If you accept the wrong kind of tenant, you could be fighting for rent on a monthly basis or face a costly eviction. What you need to do is avoid vacancies while attracting high-caliber tenants at the same time.
Strategies to Reduce Apartment Vacancy
If you need to get your vacancy rate under control, Braden Equities Inc can help you with these strategies.
1) Enhance your advertising strategy: When your units are being advertised, you want to reach as many prospective tenants as possible because it will increase your chances of finding an ideal tenant in a reasonable amount of time. For maximum exposure, list the unit on multiple websites, and let everyone and their dog know you have a unit for rent. Tell your friends, family, and coworkers. Don’t forget to ask existing occupants for recommendations, too. If they are a good tenant, they’ll likely know others.
One of the keys to good advertising is making your ads attractive. If your ad showcases a unit with less than stellar photos, you’ll turn off potential tenants. When the unit is empty, spend the time and invest the money to take professional photos. Not only will they look amazing, but you’ll also be able to reuse them every time that unit becomes available.
2) Approach your existing tenants: Here, you need to be proactive. Ask your existing tenants 90 days before their lease expiration whether they plan on staying or leaving. If they’re staying, awesome! If they’re looking elsewhere, consider offering them a small rental incentive. If that doesn’t work, then you have a good heads up and more time to search for a new tenant.
When you use this strategy, there’s the possibility of eliminating turnover costs altogether. You can even have another tenant lined up before the other one leaves, which prevents you from losing rental income.
Reduce Your Operating Costs
There are three basic maintenance strategies you can employ to decrease the asset operating costs of your apartment: corrective, preventative, and condition-based. What you need to do is look at major capital items (like your furnace, roof, etc.), and determine when they need repairs next. Identify both significant and insignificant items, the maintenance strategy appropriate for each, what kind of maintenance intervals are needed, and when condition will be assessed and repairs/activities performed. The key to these strategies is to be as proactive as possible, and optimize them according to when systems will be maintained over their lifetime.
If you want to see big changes when it comes to your asset operating costs, start with energy assessments, capital planning, and small changes. Once you know what systems need immediate replacement and which ones can be put to the side, you can create a plan for maintenance and operating cost reduction. We can help you with these tasks.
Many apartment building owners struggle with vacancy and operating costs. These strategies can help you reduce your vacancy rate and bring you great results. Just remember: be proactive, think smart, and don’t rush.