Over the last thirteen years we have worked with many different property managers. Whenever we’ve had a property that was slow to fill the property manager would tell us “It’s just the market – it’s slow.”
The property managers weren’t lying when they have said that to us. Vacancy rates were high and properties were taking quite awhile to fill on average. However, after investigation, a slow market was not really why our property was vacant. In one case, the property was run down and really needed some money spent to give it a good cleaning and updating. In another case, the ad was placed in the section for apartment units when it was the top half of a house. Fixing these issues resulted in finding good tenants fast.
But maybe you’re not sure what the issue is? Here’s how I troubleshoot my vacant rental properties to uncover the reason it’s not filling … whether we’re managing them or we work with a property manager.
1. Is the phone ringing with interested tenants?
We direct all interested tenants to CALL US to set up a viewing. I have three main reasons for this. The first is that I have wasted a ton of time in my life going back and forth over email answering questions from people who get an answer to a question only to have two more questions. Second, close to half of the people who set up appointments via email do not show up to their appointments. This wasn’t just one experiment where I tested this … I have periodically tested this over the last five years and this is consistently the case. Finally, not getting to speak with them on the phone means missing an important step in my tenant screening process.
If a tenant is interested enough to call about the property I find we’re well on our way to finding the right person for the property. And with this process firmly in place, I can now properly judge how many truly interested people are contacting us about the ad.
If the ad has been up for a week and I have had less than 5-10 calls (that’s my typical number but this number does depend on the target tenant type, price range, condition of the rental market and the time of year), I will go back to the ad.
Is Your Rental Ad Working For You?
How does the ad compare to the others on the market right now? Is the ad interesting and appealing? Do the pictures look great?
If everything is ok, the next thing to do is to change your ad headline and change the lead picture. The first picture people see when they are scrolling through ads can make or break your ad response so make it the best image of the exterior of the house, the kitchen or some other outstanding feature of the home.
Maybe It’s The Rent Rate?
If you think your ad is great then it’s time to reduce the rent. Typically we’ll drop it $50 to see if that gets the phone ringing. We’ll also look around to see what we’re currently competing with. Maybe there’s a bigger issue we need to pay attention to like lots of new product on the market or everyone else has a garage or some other feature we don’t have.
2. The Phone is Ringing … But People Aren’t Showing Up to the Showing
If you’re getting calls but people aren’t showing up—review your process. If you set up appointments by email or text message – stop. Only set up appointments via the phone (See above). Next, review other things you’re doing.
How long are you taking to return calls? If you take too long there’s a good chance they will be far along the process with another landlord by the time you set up your appointment. Your place becomes the back up property.
How much time passes from the time you talk and the time you show the property? We find that if people have to wait two or three days to see the property they often find another place to live before we can show it to them. Same day or next day showings are ideal if it’s possible.
When you’re on the phone with the person ask them to commit to coming to the showing and require them to take down your phone number. Have them confirm that they will call you if they can’t make it.
TIP: If a tenant doesn’t do what they say they are going to do at the beginning of the relationship—they never will. In other words if they don’t show up or they don’t call when they say they will—that is not going to change just because you have a lease. We give people one chance to redeem themselves but if they consistently don’t do what they say they will then they aren’t going to be a good tenant.
Our best tenants have always arrived for showings 5—15 minutes early. That doesn’t mean if they show up late we don’t rent to them but 99% of the time the indicators you get when you’re first speaking with someone and showing them the property show you what to expect throughout your relationship.
3. Tenants Are Viewing the Property But Not Applying
If you are showing the property but not getting applications—take a look at your unit and your rent rate again.
We’ve had to face the harsh reality a few times – sometimes a place doesn’t look as nice as you want to believe it does. Usually a good professional cleaning will do the trick to make a property show well but other times you just HAVE to do a little work to replace the stained carpet or paint the room that you tried to just touch up.
If you’re getting calls, the rent rate seems competitive, and people are showing up to see the property but nobody is interested take a hard look at the property. The other thing … and this is a big one for us now … if the unit is currently occupied and just doesn’t show that well you may have to wait until it’s vacant. It sucks to guarantee yourself missed rent but if it isn’t looking good, you are wasting your time showing it and you could be attracting the wrong kind of tenant showing a rougher looking property.
Finally, check your suite décor and features against other suites. Is yours outdated? Simple changes like upgrading the hardware on cupboards, changing light fixtures and paint can often update a unit cheaply and quickly and make it appealing.
Making sure the inside looks good is important, but curb appeal is critical. If there is junk in the yard or the yard is not maintained, this can make potential renters walk away before they even look inside. A lot of renters find their new homes by walking or driving around an area they want to live and looking for signs. If they see a run down exterior they probably aren’t going to be too anxious to check out what’s inside!
We’ve been through some really slow rental markets in the last 13 years. We’ve suffered from several vacant rental properties and these steps have always helped fill our properties within a few weeks of making adjustments. Sometimes it does mean putting in some time, effort or cash to make your property look better but it’s always worth it to get a great tenant in there paying rent again! If you have a place that has always attracted good tenants in the past or it’s in a great area, these simple steps will solve most of your rental challenges. In slow markets you do have to be a little more patient and you have to take special pains to make your property shine compared to the competition but again, it’s possible to keep your places rented most of the time.
We have plenty of videos and articles to help you manage your properties well. Here are a few others you might like to check out: