Yeah, well, tell me something else I don't know!
Alright, everyone, call down... I WILL tell you some things that will take the stress out of you holding on to some vacant units and get you up and running as quickly as possible.
Aside from the obvious costs to the ghost town you call Apartment #4J (mortgage, insurance, taxes and all the utilities), there are other expenses you may not have thought about: vandalism, keeping that yard weed-free (aka landscaping) and freshening up your ghost town to make it look warm and inviting to your next prospect...
So, without further adieu...
Here are 7 things you can do to slash your vacancy rates:
Smooth Move 1: Review Your Neighborhood
Your neighborhood is different than every other neighborhood in the world. Why? If you can't answer this question, it is the reason you have higher vacancy rates than most. What makes your neighborhood special? Does it have a farmer's market you can walk to on Sundays? Are young families moving into the area (more so than in years past)? Even if you own a unit in a "not-so-good" area, find something positive to market to your clientele! "Discount food stores within walking distance!" Whatever it is, spin it! Make it work for you and your potential clients! And if you don't know, you need to spend some time in that neighborhood and really think about what makes it unique.
Smooth Move 2: Visibility
How many times have you heard the term: location, location, location? Exactly. Countless times. Before you invest in a rental property expecting to sign a hot new lease agreement with someone, consider how much drive by traffic your building will receive. One of the properties I manage gets nothing but drive by traffic (which saves me money on advertising). If you are buying in a neighborhood known for it's personality, make sure you invest in a property that is easily seen from the street.
Smooth Move 3: Whip that Baby Around Quick!
Be smart about your turn-overs and how to make them as efficient as possible. Make a simple list and contract your vendors to do their jobs as close together as possible. For example, when I am turning over an apartment, my list goes something like this: Maintenance "make-ready" for everything that has to be done during the week (removing wall plates, taking off fixtures, etc.), fresh paint (you obviously want to leave the floor cleaning/carpet installation AFTER the paint has been finished, new flooring/floor cleaning, blinds/window coverings, replacing fixtures, etc. and finally ending with janitorial cleaning.
If I am pressed I can do a complete make-over in 5-6 days. Why? Because I know the order and the vendors and can count on them... if one guy shows up a day late, you have to reschedule your entire week's worth of vendors. Learn and write down a schedule that works for you and keep the vendors numbers and days they are arriving in plain view. Call to confirm them the day before. It's your job to make sure they show up... what does it cost them to not get the dates mixed up? Exactly... nothing!
Having a quick turnover, puts money in your pocket...
Smooth Move 4: Know what to Charge for Rent!
If you are just guessing and don't really know what comparable units in your 'hood are going for, you will be the one at a loss. I do a simple "market survey". Shop your own neighborhood to find 3-5 units that are comparable in size and the type of building. When they have vacancies, call the manager (keep their information because you will be calling every three months) and ASK what they are charging for their units. They don't know who you are or what you're doing... this information is invaluable in making sure you get that next lease agreement signed pronto!
Smooth Move 5: Market Your Vacancy Correctly!
Put yourself in the shoes of your potential tenants. Who are you reaching out to? If you own in an Hispanic neighborhood, consider running your ads in a Spanish newspaper. As a landlord, we use computers all the time, but a lot of people don't... where is your clientele likely to see your ad? Outside Walmart? Near a Home Depot? What about posting inside the nearest coin laundry facility? Sometimes a perfectly placed flyer can swarm your place with computer illiterate potential tenants ready to sign your lease agreement.
Smooth Move 6: Consider an on-site property manager.
If you own multiple units all in the same neighborhood, you might want to consider hiring an on-site manager. Typically buildings with on site management have quicker turn-arounds and thus, fewer vacancies. And in most states, buildings with a certain number of units or more HAVE to hire on-site management... know the law in your state.
Bonus Smooth Move, let's call it 6-a: If you hire someone to live in your building and run your properties, they are going to learn all of the smooth moves listed above and save you time in the long run. Do it! It's a good move!
Smooth Move 7: Terms of the Rental Agreement
The longer the terms of the rental agreement (two years as opposed to one), the fewer the number of vacancies. So, who wants to sign a longer lease agreement? I will tell you who... people you dangle sweet tasty carrots in front of... why not offer a one year at a certain price and a two-year at a slightly lower price. In this world of commitment-phobes, you have to offer them something to get them to want to stay longer!
What if you give them a $50 per month discount if they choose a two year lease agreement? Or tell them, if they are willing to sign off on a two-year agreement, you will agree to keep the rent the same - "lock it now, fellas!"
Come on now! It's not that hard, is it? You have now learned 8 Smooth Moves that can put some dough in your pocket!
Stirling_Gardner
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