As a rental property owner, your main goal is to keep your property rented to quality tenants, but when the economy slows, it can be challenging.
The key factor of an investment in real estate is a quality tenant. A good tenant in a bad location is better than a bad tenant in a good location. So the familiar adage, “location, location, location” doesn’t apply here. And when the economy is slow your challenge is doubled.
Doing the legwork necessary to land a top-notch tenant who will pay his rent on time and take care of the place as if it were his own is a grueling task at best. In fact, nearly 60% of the landlords and property managers in a recent survey said that finding the right tenant is the most challenging aspect of rental real estate. Add to that equation a sluggish economy and you have a perfect storm for ‘property owner anxiety’.
The trickle-down effect a sluggish economy can have naturally impacts rental property owners and tenants both. For renters, the moving process in and of itself is a costly one: transporting furniture and belongings from one location to another, putting down security deposits, and sometimes multiple months’ rent. All of these costs add up quickly. So that means that property managers and landlords have an even tougher time finding quality tenants.
Knowing your market is vitally important. If your prices are comparably too high, you may be guaranteeing that those renters who are out there won’t even consider your property.
Advertise like a pro and point out the amenities that can compete with other rentals. For instance, Do you pay heat and hot water? Are your units larger than most? Do you have a pool or in-house washers and driers? Perhaps a convenient location that will save your tenants commuting costs? If so, be sure to mention these. It could make all the difference.
Offer incentives even if it means lowering your profit margins for a short time. After all, that’s better than letting property remain empty. Also, be willing to negotiate. If you find a tenant with a good credit report and track record, you may be better off negotiating and getting them signed up than to leave your property vacant.
Be flexible with your rental qualifications. For example, if you generally don’t allow college students, perhaps this is a good time to consider them. Same goes for pet owners. This is not to suggest you deconstruct your entire rental procedure—again, remember, these problems are only short-term—but if you find a particularly responsible college student with a co-signer or a renter with a small pet and explain very specific rental guidelines, this may be the time to consider expanding your pool of potential tenants a bit.
When the economy is unsure, certainly it’s a time for everyone to be very conscious of their spending and the market around them. However, regardless of current conditions, people will always need a place to live. Just be aware of your local market, stay abreast of the tactics that other property managers and landlords are using, and be creative and flexible. And remember, although your profit margin may dip in the short-term, by following these strategies you’ll be better able to keep those vacancy rates low and weather the economic downturn.
A final word before you throw in the towel, remember, Cousin James Management is available to help you source those ideal tenants. Our vetting process is scrupulous and letting us do the hard work makes your job a lot easier. Contact one of our property management specialists today and we’ll help you find your ideal tenants in very little time.