There are a lot of opportunities for real estate investors, but sometimes it can be difficult to rent out a property-- especially at a time when there is a lot of economic uncertainty going around. However, just because your property is vacant right now doesn’t mean that it will be vacant forever. On the contrary, there are a lot of things that property owners can do to deal with a vacancy and get their property rented as quickly as possible. Quick reading to find out why properties stay vacant, learn about some of the best tactics to generate interest from renters and get advice about when to cut your losses and sell.
Table of Contents - Property Not Renting Fast Enough? Here's How to Turn it Around and Make a Backup Plan
Before taking steps to deal with a vacant property, it’s important to understand some of the reasons why your property is vacant, to begin with. Finding out more about these common problems can give you a better idea of what to do next to get your property rented.
Rent is too high
One of the most common reasons why properties stay vacant is that the rent is too high. Overpriced rentals are far less likely to attract renters, especially if they can find similar properties or units in the area at a much lower price. While a lot of property owners have a hard time accepting a price decrease on rentals, it is often the most cost-effective option. As an example, consider a unit that is priced at $1,200 a month. If the price is reduced to $1,000 a month, it will generate $2,400 less per year. However, every month that the unit stays vacant, the property owner loses $1,200 in potential revenue. Reducing the price to $1,000 and renting it out immediately is likely to generate more money during the year than running the risk of having an empty rental for months on end.
You aren’t marketing your rental the right way
Sometimes, the problem isn’t with the rental itself but with the way you are trying to market it. Consider where your current listings for your property are and what they look like. Renters are unlikely to express interest in a rental if there are very few photos and the images are low-quality. Furthermore, renters are less likely to respond to listings that don’t have enough information about the property or the requirements. Refresh your listings with quality photos and revamp your strategy to get your listings up on more platforms.
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Problems with the unit
If the price is right and your marketing strategy is on point, there might be a problem with the unit that’s keeping renters away. Some common problems include a lack of accessibility, outdated appliances, a run-down exterior or an awkward interior layout. These problems can be much more difficult to fix than a sloppy listing or a price miscalculation, but it’s often necessary for property owners to invest a lot into units before they generate interest from renters.
Excessive security deposits
Security deposits help protect landlords from destructive tenants, but there is such a thing as too much when it comes to deposits. If the security deposit is too high, many renters simply won’t be able to afford it and will opt for a rental that’s not as challenging. As a general rule of thumb, security deposits should be one month’s rent. While that amount might be increased if renters have some problems with their rental history or credit report, it’s best to stick to the standard deposit to avoid scaring renters away with any excessive costs before move-in.
Bad customer service
Who do interested renters speak to when they want to rent your property? If it’s a grouchy property manager or impatient assistant, chances are that they won’t be eager to move in. First impressions matter and negative interactions can drive away renters from your property. Make sure that you can count on the people who are part of the rental process to be kind, informative, welcoming and courteous to any potential renters. It’s also important that everyone knows what is and is not appropriate to ask a renter to ensure perfect compliance with Canadian housing discrimination laws.
When renters visit the property for a walk-through, they aren’t just looking at the unit, they are also checking out the neighbourhood. While there isn’t much that a property owner can do about neighbours in a single-family residential neighbourhood, there might be some steps for property owners to take when dealing with problem tenants in a multi-family residential building who might be scaring away potential renters. Make sure to stay up to date on what’s going on at the property so that you’re aware if there are any tenants who are causing a lot of problems.
When to sell
Even with a lot of time and effort, sometimes properties just don’t attract tenants. When that happens, it might be a good idea to consider cutting your losses and selling the property instead of sinking even more money into a vacant unit. One of the factors that should be taken into account is the state of the local real estate market. If the market is growing, it might just be a matter of time before your property attracts new renters. On the other hand, if the market is on the decline and there’s no hope in sight for the local market, it might be time to cut your losses and sell to try and recoup some of your investment.
Risk is inherent in real estate investing, but it can still be difficult for investors to deal with a property that isn’t generating any money. While it’s normal to feel frustrated you have to sell a property, there’s no reason to lose hope after one investment goes bad. In fact, most investors with large portfolios have experiences with investments that went south and ended up costing far more money than they made. With that in mind, do your best to stay positive and remember that there are always more opportunities out there for real estate investors.
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