When it comes to property management in Australia, tenant turnover is one of the biggest expenses that significantly affect revenues from property investment. As the property unit becomes, vacant rent is lost while costs such as advertising cleaning maintenance and repairs will pile up. Therefore, landlords or property managers’ end goal should be to reduce vacancy rates to increase property investment profitability.
At the same time, you ought not to lower the set standards so that people can occupy the property quickly. Such a move may bring could about around wrong tenants that would imply your risk of costly evictions as a result of nonpayment of rents. Because of that, as you devise ways to reduce vacancy rates, there should be measures to attract high-caliber tenants.
Treat your current tenant patiently
A prudent property manager should inquire early whether an existing tenant would like to stay for another term; preferably 90 days before the expiration of the current lease. If there is a response on the notice is attained within 30 days, the manager can consider giving the individual a small rent increase or no incremental at all. Therefore, In case the tenant chooses not to renew the existing lease, you will have 60 days which is plenty of time to search for another tenant.
Implementing such a measure:
Eliminates turnover costs: lowering rental increase can be an incentive to make a tenant stay longer.
Prevents rental income loss: If tenants choose to leave, advertisements will start early according to the notice received. In that manner, a new tenant will be on standby to replace a leaving tenant.
There will also be adequate time to perform inspections, conduct repairs and carry out maintenance.
When you cast the advertising net wider, you will have a greater pool of prospective tenants thereby increasing the chances of acquiring good tenants. You can start by asking existing tenants, family and friends about recommendations for the upcoming property. Afterwards, you can maximise the exposure through listing in multiple real estate websites.
Apartments can be quickly occupied when there are attractive advertisements which heighten the chances of attracting many renters. For that reason, take professional photos that appear appealing when the property is empty. It might be distracting if you take pictures when tenants are occupying the unit.
So as not to waste time, the important aspects of the units are the ones that will be included in the ads. As you disclose crucial information about the apartment in the advertisements, set the upfront credit requirements. If the advertisement entails rental criteria and property details, you will avoid wasting time on wrong applicants.
Understand market dynamics
Current conditions in the property market can guide you on the rent that should be charged to avoid vacancies. If you want to have a good idea of the amount of rent to charge your tenants, check the comparable properties rent prices. Knowing the prevailing rent in the neighbourhood will allow you to charge the right rent price. Otherwise, you might end up charging too high rent amounts that would deter applicants leading to longer vacancies.
Once you have a better idea of the neighbourhood market alongside demographics and vacancy rates information, you will be in a better position to choose and retain tenants.
Maintain the property in a good condition
If you see a property the way a prospective tenant sees, you will realise how to maintain the property properly. Indeed, any tenant who intends to move into a business unit will desire to occupy a property that is in good condition. Hence, putting some interior painting or replacing broken blinds can make a significant difference yet it isn’t such an expensive improvement.
If you want to attract many tenants, try putting a fresh coat of paint after some time to make the interior of the property appear bright and appealing. Another good idea that would be appealing to the prospective tenants is to replace the old carpets. Furthermore, other cost-effective and convenient maintenance improvements can be new shower curtains installation, worn-out leno replacements and kitchen cupboard doors replacement.
Carefully screen to identify the ideal tenant
Even if there is no adequate time, tenant screening is a crucial activity that should not be omitted. Carefully screening of tenants to occupy a rental property can help you obtain the following information:
- History of making payments
- Eviction history of the applicant
- Any criminal record that would put a risk on the property or neighbourhood occupants.
Therefore, you will gauge whether the applicant meets the screening criteria when you have eviction, criminal and credit information. With that kind of data, you will be able to select the ideal tenant and avoid unnecessary, costly evictions.
In a highly competitive rental market that entails big apartment complexes, smaller landlords can choose to ease the terms to make it flexible to get tenants. For instance, if a potential tenant has a low credit score, consider other factors before considering disqualifications. In a nutshell, you will make a more informed decision if the screening process goes on well.
Retain good tenants
An easy and cost-effective approach a property manager can use to avoid rental vacancies is to keep the current tenant. Many real estate property analysts suggest that even if a landlord has to forgo rent increase to keep a good tenant, it would be a worthy cause.
Sometimes a small rent increase cannot effectively counter the property re-letting costs. Thus, it is wise to retain the same rent level to enable a good tenant stays on the premise.
Make sure to let the property fast
Whenever there is a vacancy, make efforts to ensure that the property is occupied in a shorter time. In practice, if for the first two weeks the property is not let then the risk of the property to remain vacant for much more extended periods is high.
Evidently, after listing a property, letting interests usually peaks within the first two days. Make sure you attend to most queries as early as possible to increase the chances of letting.
As time continues, letting interest inquiries of your property will reduce as more new properties continue to be listed on the property market. After a long time since listing, several prospective tenants will start to suspect that something might be wrong with the property.
In a nutshell
There is not a single property manager that would want to see managed rental property units staying vacant for a long period. Fortunately, when the above-discussed measures are adhered to, the vacancy rates will be minimal and more returns will be reaped from the property investment.