Lengthy vacancy times can damage a real estate investor's bottom line. Not only is there no rent money coming in, but the cost of maintenance, repairs, advertising, and cleaning costs also add up while you wait for your next resident. Reducing vacancies and the time between tenants are two ways to improve returns, but what are the best strategies to make that happen?
While it's important to reduce tenant turnover, landlords also don't want to cut corners to place "just any" new tenant to fill the rental property, only to go through an even more expensive eviction process a few months into the tenancy. So our Detroit property management experts have compiled a list of tips to help you reduce vacancies and generate more consistent cash flow!
Keep Good Tenants For As Long As Possible
The best way to reduce vacancy times is to keep a good tenant for as long as you can once you find one! A lot of time, effort, and money goes into finding a new tenant, so keeping them as long as possible makes sense. Plus, retaining more residents reduces your costs for marketing and the make-ready process during tenant turnover.
What are some ways a landlord can keep a tenant longer? Property managers recommend:
Reasonable rent increases. It is necessary to raise the rent occasionally, but going too high too quickly can discourage renters from renewing. Tenants typically expect a rent increase when it's time to sign a lease. Let them know with plenty of time before their current lease ends, and always keep your rent increases to a reasonable amount. Slowly raising the rent by three percent annually is less likely to drive away good tenants than a significant increase, especially if you haven't made any noticeable improvements to the property while they were there. Finally, be sure to follow any laws specific to your area that govern rent increases.
Show the tenant you're a good landlord. Property owners can impress a tenant to encourage renewals by living up to their landlord responsibilities. When a tenant puts in a maintenance request, respond promptly to either fix the problem or let them know where you are in the process. Be proactive with serving residents well and keeping rentals in excellent condition.
Communicate effectively. An open line of communication is paramount to the landlord-tenant relationship. However, communication is more than just letting a tenant know about a repair that was made or when rent is late. Check in to see how they're doing. Let them know about any work that may be happening on or around the property. Keep your tenants in the loop whenever possible.
The best way to manage renters well and improve retention is to let a property manager handle it for you!
Start the Renewal Process Before the Lease Term Ends
What else can owners do to improve renewal rates? Property management experts recommend getting a head start on the renewal process. Two to three months before a lease expires, send a letter reminding the tenant the lease will end soon, ask if they are planning on renewing the lease, and let them know of any potential changes for a new term.
Waiting too late to encourage renters to renew can leave you with an empty property if tenants have already found a new place to live after the lease ends.
Hire a Detroit Property Management Company
Reducing vacancy cycles and improving renewal rates are critical strategies, but they can be challenging to put into practice. Turning your leasing and renewal process over to the best property management Detroit offers is an excellent solution! Property managers specialize in the entire rental process, from marketing to tenants screening, leasing, renewals, and make-readies when residents don't renew.
Do you really need a property manager to shorten vacancy times? Here are three good reasons why it's a smart idea!
1. They Don't Get Paid Unless You Do
Since most property management companies don't get paid unless there are renters in the property, they are motivated to get the process done as quickly as possible. However, the best managers are still thorough with tasks like tenant screening and the make-ready process to make sure you always get a quality resident.
2. They Have Qualified Staff
Unlike a sole landlord, property management companies have the staff to take care of everything. They have leasing agents to handle the renewal process and deliver excellent management and maintenance services for residents.
3. They Have the Marketing Expertise
A property management company has the marketing experience to create the perfect listing to attract your next great tenant. Minimizing vacancy times requires the right mix of efficient make-readies, expert marketing, and quality screening and leasing!
Reduce Vacancies With the Best Property Management Company
Long vacancy times can drain your finances. The best plan is to work with a professional property management company to handle every renewal task to reduce the vacancy times and keep high-quality tenants in your rental property. If you're looking for help managing your rental properties, take a look at Own It Detroit and our property management services. We have seasoned investment professionals to reduce your vacancy times and keep your cash flowing in the right direction—to you!
For more help finding the ideal property manager, download a free copy of "The Guide to Finding the Best Detroit Property Management Company."