The vacancy rate of your rental property is a huge factor in profitability. The higher it is, the lower your rental income will be. There are a couple of ways to reduce and prevent high rental vacancy rates, and implementing them can significantly boost the appeal of your rental business to potential and current tenants.
What You Can Do to Reduce Vacancies
Thorough Tenant Screening
Background checks are a crucial element in ensuring a profitable rental business, as it lets you determine whether prospective tenants can pay the rent, maintain the rental unit, and follow the rules of your lease agreement. Vacant properties are the biggest expense that you can face, and choosing the wrong tenant is a fast track to turnover and other costly issues like eviction or property damage.
Competitive Rental Prices
Research the local market and consider the monthly rent of similar properties in the area. This provides you a basis for setting a competitive price, as it is one of the most basic ways to reduce rental vacancy rates. Applicants will likely opt for other rental properties that are cheaper in price but offer the same space and amenities as yours.
For assistance with this, we offer all Houston landlords a free rental analysis tool on our website.
Effective Marketing Strategies
How you market your property will affect how many tenants would be interested in even viewing your rental listing. It would be advisable to use great photos and highlight the unique features of your rental property. If you want to fill vacancies quickly and feel like your campaign is ineffective, you can choose to hire experts in marketing who can provide you with professional photos.
Fast Response to Maintenance Requests
Addressing maintenance issues efficiently contributes to overall tenant satisfaction, and therefore prevents higher tenant turnover. Your existing residents will recognize the service you provide and will likely turn into long-term tenants. Regardless of the benefits, it is also the basic responsibility of a landlord to conduct maintenance regularly to retain property value.
Offer Lease Renewal Incentives
Rental businesses that offer incentives are more attractive to both potential tenants and current residents, which will help minimize vacancies as well as reduce resident turnover. This can come in the form of rent discounts, cash incentives, flexible lease terms, free access to paid property amenities, and more.
Improve Curb Appeal
Listings aren't the only way of attracting new residents to your rental property, traditional methods still play a role. People in the area looking to change rentals still do so by driving around desirable neighborhoods and exploring what kind of properties are available. You can improve curb appeal through simple means like repainting the front door, landscaping, adding new decorations, and cleaning the pavement. These tactics make prospective renters want to stop and pay attention to your property.
Provide New Amenities
Look into the amenities that are in high demand. With modern standards, smart technology like smart thermostats and smart speakers are sought after by tenants. There are also common yet appreciated amenities like additional storage space and in-unit facilities. Furthermore, the units effectively increase the value of your rental so you can charge more rent.
Adopt More Payment Methods
Offering convenient payment methods is also a good way to retain tenants. Landlords can utilize free platforms like cash apps, but there are also more efficient methods like subscription-based rent collection apps that can automate the payments for monthly rent. Some property managers offer tenant portals that can be accessed 24/7.
Create a Good Living Environment
Being competent in overall property management and providing a comfortable living environment exponentially prevents high vacancy rates for rental property. From the moment new tenants move in up until they leave, your service should be consistent as this can lead to word-of-mouth marketing for your rental property.
Create a Referral Program
Just like lease renewal incentives, you can also reward residents who successfully bring in new tenants by referring your rental property. This can be a cheaper marketing strategy for property owners and can reduce rental vacancy rates faster. You can offer the same incentives for residents renewing leases.
What Happens If I Fail to Reduce Vacancy Rates?
Failing to fill vacancies can affect your business financially, and it will deter real estate investors if you are looking to exit the business. While vacancy rates are sometimes hard to control, you can always hire real estate professionals to help you market your rental business.
How to Calculate My Property's Vacancy Rate?
The formula for calculating vacancy rates is: Vacancy Rate = (Number of Vacant Units / Total Number of Units) x 100. You can also use readily available tools like Precision Realty's Vacancy Loss Calculator, which lets you determine the financial impact of your business's total number of vacancies.
What Are the Benefits of Reduced Vacancy Rates?
Other than steady or increased rental income, you will also avoid marketing and turnover costs. While there are free marketing practices you can do, some of the most effective strategies will cost you. In the long run, it can even help increase your rental property's value.
Low Vacancy Rate vs Tenant Retention
Low Vacancy Rates: low vacancy can be achieved in many ways— one is by screening your applicants meticulously to ensure you get good tenants, another is by improving your property to attract new tenants, and lastly, treating your existing residents as a landlord should so they would stay in the rental longer.
Tenant retention: Tenant retention, on the other hand, is one of the factors that help you maintain a low vacancy. When renters are treated right and fairly, they are significantly more likely to stay long-term in their rental unit. This sub-section also has its own methods to be achievable.
How Can Professional Property Management Help Me?
It's not uncommon for landlords to hire property managers to handle their rental business to maximize its value. Whether the rental market is at its worst or best, hiring assistance can open a lot of doors for you.
By hiring our team at Precision Realty, you can earn passive income as you focus on other profitable ventures. We offer Houston’s most premier property management services to our owners, maximizing their financial investment while minimizing their time investment.
Contact us for a free consultation and we can help you make this a reality for your business!
