Avoiding vacancy in your rental property is one of the most important keys to increasing your ROI, so it’s important that you shorten the time that your property is unoccupied. At Mynd Property Management, we’ve been working with some new tools and strategies to help avoid vacancy. We want to share some of the things we do to ensure our properties are occupied by great tenants.
Tenant Retention: Keep the Residents you Have Now
Understanding how to keep the tenants you have in place longer is the best way to reduce your vacancy rate and increase the amount you earn on your rental property. It also leads to a home that’s better maintained because your residents are staying for the long-term, so they’re more invested in keeping the property clean and well-maintained.
Good tenant retention leads to shorter turnover periods and lower turnover costs. Make it a better rental experience. When landlords provide a good experience, they attract better tenants who will be with them longer. We talk about this a lot, but it’s worth harping on. Make sure your tenants know that you’re responsive. Make sure you’re delivering on your promises and giving them an outstanding rental experience.
Tenant needs must be a priority for you. Be proactive in the way you communicate, respond, and follow up with them. This is something that we have learned to do from the beginning of our relationship with every resident.
Tenant Retention Tip: Welcome Gifts
Providing a small gift at move-in is something we’re committed to doing, and it sets the tone for our tenant relationship. If you already have a tenant in place, you can still do this right now. We call it a welcome gift, and it’s usually something like a $25 gift card to the local coffee shop. It puts our entire approach to property management in a positive light for our tenants, and we’re taking steps towards tenant retention before our renter even moves in. You can do this too – it works.
Tenant Retention Tip: Maintenance Responsiveness
Another way to increase tenant retention is by being responsive on maintenance requests. Emergency maintenance issues will obviously require an immediate response, but try to respond to routine requests with the same sense of urgency. Not only does it make your tenants feel like you’re hearing and caring about what they need, you’ll also preserve the condition of your property. Don’t let tenants request the same thing week after week because you keep forgetting about it. Respond right away, and if you’re not going to be able to fix it in the next 24 or 48 hours, let them know that you’re working on it. Communication and transparency will go a long way.
Recently, I was renting a property while I was between homes. The landlord I rented from was great and I liked him a lot. My rent was cheap, so I felt like I was getting a good deal on the home. But, he was impossible to get a hold of, even when something was broken. As a private landlord without the support of a management company, he did most of the repairs himself. So, it would take me two days to get a hold of him, and then it would take him a week or longer to actually make the repair because he had his own day job to worry about. In the end, I did a lot of the work myself because it just wasn’t worth waiting for him to get around to it.
This is a lesson in responsiveness. If you’re not responsive, your tenants won’t bother telling you about things that need to be fixed, and then you can end up with unreported or deferred maintenance. Those repairs can get expensive.
Or, the tenants will get frustrated with your lack of response, and they won’t renew their lease. If they really feel like you don’t care about them or your property, they might not even stay throughout the complete lease term.Maintenance issues are important, and you need to respond to them right away. The way you treat your residents will define how long they stay. Keep them happy so your turnover and vacancy times are reduced and your ROI is increased.
Reducing Turnover Time Between Tenants
We always hope to place a tenant who is going to stay for 10 years. Even with a 10-year tenant, that renter will move out eventually. A shorter turnover time between the tenant who is moving out and the tenant who is moving in will increase your ROI and drive down your vacancy rate. There are a few things you can do to limit the number of days that your rental property is unoccupied.
- Market the home while your tenant is in place. There are some complications to this, and we don’t recommend that you show the property while someone else is living there. Instead, you can begin your marketing and gather prospects. Then, you can show the home when the tenant has moved out and you’ve prepared the property.
- Schedule your maintenance crews ahead of time. Turn the property faster by getting inside the day your tenant moves out. Conduct your inspection so you know what needs to be done, and get your maintenance team inside as soon as possible.
- Be systematic. Have a plan in place before your tenant moves out. Every turnover should have the same timeline and the same category of work that needs to be done. Shampooing the carpets and cleaning the property will be last, but you can still schedule the vendors. You’ll want the drywall repair and the painters to come in first.
- Get them scheduled. If you’re thoughtful and systematic, you can reduce the number of days your property is vacant. We know it’s easy for self-managing landlords to get busy and forget to schedule the painter. So, two weeks later you’re finally getting the paint done, but then you have to call the cleaners and they won’t be able to come out for a week. That pushes your vacancy time further. Have a system so that everything gets done quickly. You don’t want a three month vacancy. It will hurt your ROI.
- Hire someone if you need to. When you don’t have the tools, time, or resources to turn your property around in a matter of days, hire a general contractor or better yet – a professional property manager to help you. The cost you incur in hiring a professional is more than made up for in the reduced vacancy time.
Finding a New Tenant
Once you get the property turned and ready for the rental market, you want to immediately start the leasing and rental process over again. You’re ready to find a new tenant.Market it the property aggressively and strategically. Anyone who has ever rented out a home knows the regular online advertising channels. You’ll want to have your listing prominently displayed on sites like Zillow and PostLets and HotPads. You know that you want to take really great pictures that show off your property, and you want to write great descriptions that inspire prospective tenants to call you and schedule a showing.
These things are important, but even more important is responsiveness. It’s not enough to place an ad. You have to respond to the tenants who are calling and sending messages. Lots of tenants are looking for rental homes, and it’s astonishing how few of them are getting any responses from landlords and property managers. Respond as quickly as you can when someone calls or texts or asks a question. If you’re proactive, you’re going to attract great tenants and you’re going to stay well ahead of the competition.
Use a smart lock so prospective tenants can see the property whenever it’s convenient for them. This is called self-showing, and it’s very popular with tenants today who have busy schedules and enjoy doing things themselves. We’ve seen huge results on self-showings. It reduces the amount of time that your property is on the market, and it helps you automate and systemize your leasing process.
With the right technology supporting you, it’s possible to allow tenants to see your property at any time between 8:00 a.m. and 8:00 p.m. You don’t have to coordinate anything or rush over to the property. Once they’ve seen it, you can follow up with an email asking what they thought. You can include a link to the application. Make it a personal and responsive experience even if you’re not there showing the property yourself.
We like to keep our vacancy periods as short as possible during turnovers, and we’re comfortable turning a property in 21 days or fewer. This is an excellent goal to set and it will ensure you have a successful rental investment experience. If you’re waiting two or three months to have a new tenant move in, it’s hard to be successful.
If you are trying your hardest to reduce your vacancy and you just can’t figure it out, contact us at Mynd Property Management. We’re here to help and we can coach you through it or take over and do it for you ourselves.
Benton Cotter is the VP of Regions for Mynd Property Management. As such, he’s in charge of managing the on-the-ground operations team, including the firm’s Regional Directors. Most recently, Cotter was one of the founding members of RentVest.