Want Fewer Vacancies? Duh, Of Course You Do!

If you want to lose money fast, own a vacant rental property.

For a real estate investor, a vacancy can cost thousands of dollars each month. The loss of rental income combined with the cost of maintenance, professional cleaning, advertising, and finding and vetting a new resident adds up very quickly.

Some of it might be beyond your control, but there’s plenty you can do to keep your residents happy right where they are.

Why Rental Residents Leave

Who you rent to has a lot to do with turnover rates.

High-Earner Resident — Considered stable and ideal, but are more likely to move up in the world by climbing the job ladder or purchasing a home.

Mid-Earner Resident —  Stable and the least likely to move. They have a reliable income but are less likely to make a move for a job or buy a home. 

Low-Earner Resident — Considered unstable and unreliable. Their income month-to-month may not be consistent or able to cover rental costs comfortably. This can lead to quick turnover and lost payments.

Other demographic factors may influence resident turnover, including:

• Family Size
• Age
• Relationship Status
• Neighborhood
• Local Job Opportunities
• Nearby Amenities
• Cost of Living

In short, residents leave for two primary reasons:

• They’re experiencing a major life change (ie. new job, marriage or divorce, having children)
• They found something more affordable.
  
  

7 Ways to Minimize Vacancies 

1. Pick Prime Locations

Location doesn’t just impact the future value of your property. Location can incentivize retention or increase turnover. Residents want to live in safe neighborhoods in robust job markets. They want to be in good school districts and close to amenities. On a broad scale, resident retention is higher in the southeastern United States than in other regions, even if the overall vacancy rate is higher. Choose your markets wisely.

2. Build Real Relationships

Your residents need to form a real relationship with someone. That might be you as the owner or it might be your management team. Regardless, they need to feel like they’re more than dollar signs. Make formal introductions, offer a welcome basket, and make yourself (or your management) available. The more comfortable and authentic your communications, the more willing residents will be to bring up issues...and stay long-term.

3. Responsive Management 

If a resident is constantly frustrated by their home, they’re going to look elsewhere. This demands responsive, proactive management. They should be clear about timelines for making repairs and replacements and quick to respond to concerns. Transparency is key. If a resident can’t reach their point of contact in a moment of crisis, it will break their trust in you and the reliability of their living arrangement.

4. Maintain Quality

Sometimes turnover is inevitable, but turnover doesn’t have to turn into a prolonged vacancy. When your management team is proactive, they’re able to maintain the quality — and value — of your property. This means maintaining curb appeal, structural integrity, and the quality of the property’s features from flooring to appliances. Attentive property management is key in preventing a major overhaul when your residents move out.

5. Reward Loyalty

Nothing scares a resident away faster than a sudden rent hike. Reward loyalty by providing incentives for your best residents. It might be a small discount when they sign a longer lease, added service or amenities, or something else altogether. 

6. Screen Carefully

No resident is going to be the same. Whether you do it yourself or have a management team doing the screening, it needs to be taken very seriously. That means thoroughly checking references and pertinent personal information as well as evaluating whether or not your potential resident is a good fit for your property. You may get a sense in talking with them about how long they intend to stay and what the future may hold. After all, you don’t want a resident who is just sticking around until “something better” comes along.

7. Automate Systems 

In the digital age, no resident wants to fool with old-fashioned ways of paying their dues. Move into the future with automated, online ways to pay rent and request maintenance services. There are several high-quality property management platforms out there that are worth the investment.