Being a real estate investor is all well and good when the rental income comes in every month on the dot, but what if you have a vacant property?
Whether you're stuck trying to figure out how to find a new tenant for your recently purchased rental property or have to remove a renter who couldn't keep on top of rent, property vacancy can be a stressful and costly time.
All property investors dream of long-term rental periods with quality residents, but it's equally important to consider and prepare for the worst. Having a plan for property vacancy can save your bottom line, give you more confidence, and get new residents in there ASAP.
That's why in today's blog, we'll look at the issues with property vacancy, three key strategies a property investor can use to fill their property with residents, and a foolproof bonus tip.
Vacant properties are costly problems. You're essentially paying for several incurred costs, including:
Due to this, long-term vacancy can lead to significant income loss. Therefore, even with the opportunity for some tax deductions, it's not worth it to have your asset sit without residents for too long. Additionally, the longer a rental property is off the market, the likelihood of legal issues increase, such as adverse possession, squatting, and vandalism.
However, don't panic! It's ok to take your time and go through the steps methodically to find the right residents for your property and uncover why it may be vacant.
If you know your residents are not renewing their agreement, it's time to list the property. This means it's time to shift from "renewal" mode to getting the property ready and finding a new tenant to move in soon after your current residents move out.
Be sure to list the rental unit as soon as possible with a compelling property advertisement. Also, don't focus solely on one listing site but spread the listing across many rental websites.
Reducing vacancy times involves relying on solid marketing techniques such as writing a compelling listing with professional photos. Use attention-grabbing headlines and a clear and enticing description, and don't forget to include the rental rate!
While you may have to outlay cash to create a compelling listing (for example, paying a professional photographer), consider it an investment in the property.
The most important thing to remember is that having renters paying market rates is much better than having a vacant property on your hands. Setting the rental rate too high because you have a price in mind can leave you with empty rental units.
The question of "how long can a rental property be vacant" relies on your financial circumstance and how long you can get by without the rental income.
If a week or two without tenants stretches into several weeks (or a month or longer), reviewing the rental rate may be a requirement.
Some ways to help determine an appropriate rate include:
Lowering your rate to a more competitive number can help you find residents for your investment property.
When the previous residents move out, it's time to conduct the make-ready process. This means cleaning, painting, repairing, and making any necessary updates while your listing works to deliver resident applications.
It's also a time to research the market and see what desirable components renters want in a property.
Keeping the property in good condition is crucial if the vacancy stretches longer than expected. Be sure to mow the lawn, keep it clean, run the faucets, and make it look like an active property. This helps deter vandalism and other adverse outcomes.
If these efforts aren't helping you find a new renter or you're starting to stress about the amount of work involved in resolving a vacancy, it's time to contract the services of a Newport News property manager.
Property management companies can help you evaluate the property with insider insights to ensure it's desirable to potential residents. They can also help set the ideal rental rate and manage the property until the new residents move in.
Finally, a property manager helps reduce vacancies by taking care of the residents and properties while implementing a proactive strategy when a lease ends.
As a property investor, having a vacant property can be a frustrating and expensive situation to be in. By preparing a quality listing, evaluating your rental rate, and maintaining the property, you'll get closer to finding your ideal residents and filling your investment property.
For a helping hand in reducing vacancy issues, preparing your assets for listing, and more, reach out to Osprey Property Management today!
Learn more expert insights for managing rental properties! Download our free "Expert Guide to Rental Property Management."