Vacancy Reduction - What is the Secret?
Updated: Jan 7, 2022
As investors, we get into rental properties to make money. Ideally, we want to have the lowest Vacancy Rate possible to ensure we capture most of the rental revenue. So, what is the secret to reducing our vacancy factor?
Here are Five (5) tips we think are helpful in reducing vacancy:
Keep Your Rental Property Clean - this goes without saying, but you might be surprised how many times this rule is broken. Oftentimes Owners or Property Managers will show a unit that is not quite ready, explaining to the potential renter all the changes they intend to make, hoping this will impress them into applying. It is never okay to show an apartment/home that has not received a ‘final make ready’ inspection. You have one chance to make a first impression, make it a great one every time! Cleanliness is always important and especially now as we navigate through the global pandemic caused by COVID 19.
A key takeaway here is to create a welcoming environment every step of the way, from the curb appeal to the building exterior, the interior of the dwelling, and all amenity spaces. As your potential renter is touring your property, they should be able to see themselves living there for a long time. Once they are your renter, it is equally important to continue this same level of service or better.
Make Repairs in a Timely Fashion - One of the main reasons for vacancies is not maintaining the property or responding to repairs in a timely fashion. Set a standard of expectation for work orders and keep it. For example, if your response time is within 24 hours, ensure your team is meeting and/or exceeding this each time a repair is requested. Build a preventative maintenance program for each building to address major items such as heating and cooling or roof inspections so that important repair items do not fall through the cracks. Not only will this give you and your renters peace of mind, but it is also a great marketing tool, add it to your marketing material. If you send a newsletter be sure to remind your readers of upcoming items that you are working on around the property.
Provide Amenities - Don’t go running for the hills yet, hear us out. Amenities can be as simple as providing and maintaining well-lit paths throughout the property. This has the bonus of providing a safety feature. Another option is to offer a paid utility that’s included with the rental cost such as trash removal or heat. Other amenities to consider are commonly used items such as Dryers/Washer, Garbage Disposal, Appliances, etc. The more comforts you can provide, the less likely a renter is to leave.
Another item that I consider an amenity in this industry and space is customer service. If your staff across the board provides excellent customer service each time they interact with your renters, you will create an intangible value in the experience of staying at your rental.
Create Value - this is simple and broad-reaching at the same time. Creating value for me is synonymous with creating a great experience for the renter; it goes beyond the rental price and per square foot cost. Yes, we need to be aware of trends in our market and what the competition is doing such as price increases, move-in specials, etc. but I do not subscribe to the ‘following the crowd’ type of management. Especially when it comes to managing your vacancy, my suggestion is to stay true to your goals for your property and strategy for your business. For example, as it relates to price increases, this is a perfect area to not just follow the crowd, but to create value instead.
Creating value can also show up as offering flexible lease renewal terms, an offer to win new appliances, or free month’s rent with a longer-term lease. To the extent this is feasible, create engagement for your renters whether virtually or in person. This connects to our sense of belonging and will also build community among your renters.
What I love the most about creating value, is the flexibility it allows and the variety of options to employ in reducing your vacancy.
Get to know your Renter - The most important of these is to get to know your renter. For some property owners, there is a fear of getting to know their renter. And I get it, sometimes the lines can get blurred and this will cause issues down the line. However, I am not proposing that you become best friends with each renter, but rather, take the time to learn, remember and use their name in each encounter. Remember a few key nuggets of information they have shared with you and follow up when you speak with them. For example, if you know your renter has kids, simply asking them how their kids are adjusting to learning remotely. This shows that you care.
At the end of the day, we are in a relationship type of business. Property management is about building relationships vertically and horizontally and at the center of it all are our renters.