How to reduce the risk of vacancy
No landlord wants to sit on a vacant property. What is the secret to keeping a property occupied? It starts with a common sense approach to renting. Imagine you’re the one looking for a rental property. What are you looking for? Here are some tips to reduce the risk of vacancy and keep tenants longer.
When buying to let, choose the property you purchase wisely
Some things can make it difficult to keep a rental property rented. One of them is an oversupply of rentals in an area. This is just one of many reasons why you should find out what the vacancy rate is in an area where you’re thinking of buying. If it’s high, it’s probably a good idea to look somewhere else.
Tenants don’t want to live in an area where they are at a distance from the amenities they need. These will include public transportation links, shopping centres, schools and hospitals. Look for a property that has all of these amenities nearby and is within reach of public transportation.
Statistics show that vacancy rates are often higher on noisy, busy roads. Look for a property that is close to a main road, but far enough away to be in a quiet location. Tenants generally look for areas where they feel they can come home and relax. They look for homes and apartments away from busy roads.
Rental property repairs and renovations
Do whatever renovations you need to do to make your property look clean, attractive and tidy. When prospective tenants look at a property, they want to imagine themselves living comfortably in it. Painting the interior and exterior if needed is a good start, but don’t stop there. A clean, freshly painted property will attract better tenants and higher rentals.
If you have carpeting, clean it before you rent your property. If you have timber floors, they should look like they have been taken care of. No one will want to pay for a rental that has worn looking floors. All the floors in the house or apartment should look clean. If the floors are badly worn, prospective tenants will wonder what else is wrong with the property.
Take a good look at your blinds and curtains. They should be clean and in good working order. If the curtains are worn, stained or faded, it may be time to replace them. If you have blinds that look worn, replace those, too. Also look at your fly screens. If they are sagging, you may be able to repair them. If they are torn, replace them.
The kitchen and bathroom should be in good condition. Thoroughly clean them both and replace or repair anything that is worn looking. Rather than spending too much money on renovating the kitchen and bathroom, you may be able to give them a makeover by painting the walls and cupboard doors. If drawers are sticking and doors sagging, replace the drawer runners and hinges.
If you are renting a house, the front and back yards should look well-kept. Make sure there are no weeds in the lawn and prune bushes and trees. If there is a patio and pavers, think about pressure cleaning the pavers to remove dirt and grime.
Tenants like to feel safe in their homes and apartments. It’s a good idea to invest in a security screen for the front door. Smoke alarms are required by law. They should be in good working order, with new batteries. If the smoke alarm or alarms are old, think about replacing them.
Vacancy rates increase over time
Studies have shown that the longer a rental property is on the market, the harder it is to rent. In general, interest in a property is greatest within a few days of its becoming available. After two weeks, interest wanes and it can be difficult to rent the property.
If you’ve taken the steps above and made a rental property clean and tidy, it should attract good tenants who are willing to spend a little more on the property. The key word is “little.” Find out what similar properties in the area are renting for and don’t ask for more than market value. Yours isn’t the only rental property prospective tenants will be looking at. If they find a similar property for less money, they will probably take it.
Keep in mind that asking even $10 to $20 per week more than market value will make it harder to rent a property. There are 52 weeks in a year, so every week a property stays vacant reduces your rental income by almost 2 per cent.
Since interest wanes after two weeks, you could be facing a serious financial shortfall if you ask for more than market value. It may be wise to set your rental rate a little lower than average to attract tenants. Even a small amount less than another property is enough to make a tenant choose your property over another.
If you have a “no pets” policy, you may miss out on long term tenants. If you allow pets, tenants may stay longer because they know finding rentals that allow pets can be difficult. If the pets are well behaved, they won’t cause problems and you can always clean up pet dander and pet smells when the tenants move out.
How to decrease the risk of vacancy after a tenant gives notice to vacate
Tenants are generally required to give notice to vacate before they move out, and depending on the reason, the end date of the lease, lease terms and state legislation, this time frame can change.
Generally in Victoria the period of notice is between 14 and 28 days, and if notifying by mail, adding on extra days for postage.
So if a tenant gives notice, when should you start advertising the property?
Most landlords and property managers would say immediately. Landlords and agencies should have photographs of the property that they can use to advertise it, but when it comes to showing the property to prospective tenants while it is still occupied, the water can get a bit murky.
Some tenants keep their homes or apartments clean and tidy and they may also understand you don’t want the property to be vacant and will be willing to allow prospective tenants to inspect the property. So in this case, give them advance notice and don’t expect them to be on hand every day to show the property.
Legally you must give your tenant reasonable notice in writing if you’d like to show your property to prospective tenants before the current tenants vacate. There are certain times where you can show the property as well, generally speaking, between 8am-6pm Monday to Friday and 9am-5pm on a Saturday.
What if you have tenants who aren’t exactly the tidiest? Well, use your best judgment, as you don’t really want to show a property that is cluttered and untidy.
You also don’t want to show a property if the tenant visibly resents having to show the property. In a case like this, be ready to clean the property on the day the tenant moves out. At the very least, you’ll want to make sure it is advertised so people will come as soon as possible to inspect the property.
This article originally appeared on www.propper.com.au.