For landlords, vacancies are always an issue, as they’re largely unavoidable.
Sooner or later, your tenant is going to move out (or find themselves in a position where they can no longer continue paying rent). And that means your unit is going to be empty, at least temporarily.
Vacancies are problematic because they prevent you from generating revenue, but you’ll still be responsible for all the expenses associated with keeping up with the property. You’ll continue making mortgage payments, paying for utilities, and dealing with repairs and maintenance needs – but you won’t be making any money to compensate for those expenses.
In most cases, this is only a temporary annoyance. If your unit is in a popular neighborhood with high demand from renters, you might only have a vacancy for a month or two.
But what happens if you’re stuck with an extended vacancy, lasting several months, with no end in sight? How do you manage this situation to minimize financial strain, mitigate potential issues, or possibly even spin this situation to your advantage?
Managing Finances
Let’s start by focusing on the financial aspects of an extended vacancy.
- Prepare for the long term. It’s a good idea to assume that this vacancy is going to last for many more months, even if you reasonably suspect it’s not going to last much longer. This way, you’re prepared for the worst-case scenario. Depending on your current financial situation, you may need to start tapping into your emergency fund or long-term savings to get through this.
- Do your own repairs and maintenance. Vacancies are excellent opportunities to conduct necessary repairs and maintain the home. If you have DIY skills, this is a perfect opportunity to utilize them; doing your own repairs is much cheaper than hiring a professional, even if you know an inexpensive one.
- Consider selling. If the vacancy is putting a strain on your personal finances, and you’re not sure whether the property is worth keeping anymore, consider selling it. You can use the proceeds to buy a property in a neighborhood with more rental demand.
Utilizing the Situation
Vacancies aren’t a total loss. If you’re thoughtful and strategic, you might be able to take advantage of this situation.
- Make repairs. As we’ve already acknowledged, this is an excellent opportunity to make necessary repairs since you won’t need to coordinate scheduling with your tenant.
- Issue upgrades. This is also a chance to upgrade the property. If there aren’t many people clamoring to rent it, you can make it more attractive by redoing the kitchen, installing new carpet, or tackling other renovation jobs.
- Improve curb appeal. Curb appeal is inexpensive and relatively simple to improve, but it can make a big difference in how people see the property. A fresh coat of paint on the exterior and some new landscaping additions can attract more prospective renters to the unit.
Pushing for New Tenants
Next, make a bigger push for new tenants so you can end this vacancy as soon as possible.
- Lower the price. While it’s obviously not your first choice, it may make sense to lower the price you ask for rent. If your unit is overpriced in the neighborhood, prospective tenants won’t be interested.
- Offer secondary incentives. If you can’t afford to lower rent, consider offering secondary incentives, like an extra parking space or extra storage space, to make the deal look more interesting.
- Advertise on new channels. Make a bigger push in your marketing and advertising strategies by listing the property on new channels and reaching people in new ways.
- Target a different demographic. If you’re still struggling to find tenants, consider targeting a different demographic. This strategic shift could be exactly what you need to reach people genuinely interested in renting the property.
- Get feedback. If you’ve been showing the property to prospective tenants regularly, consider asking them for feedback. If they don’t move forward with renting this property, ask them why they’re passing. Depending on the answers you get, you might glean information that you can use to make the property more attractive to people who are interested in it.
- Work with a property management company. Marketing a property and filling vacancies can be tough, especially if you don’t have much knowledge or experience. That’s why it often pays to work with a property management company that can take care of marketing on your behalf – as well as tasks like tenant screening, onboarding, handling repairs, and even managing evictions when necessary.
Mitigating Future Vacancies
Finally, take the time to employ new strategies to mitigate the risks of future vacancies.
- Be selective with new tenants. Before bringing a new tenant to your property, thoroughly screen them. You’ll want to make sure that this tenant has a consistent stream of income and that they’ll be able to pay rent every month. It’s also advantageous to choose tenants with a higher likelihood of staying in the property for longer.
- Improve communication. Good communication builds stronger landlord-tenant relationships. You should always be courteous and polite in your communications with tenants. You should also be proactive and responsive. If there’s a conflict, work to find an acceptable compromise, and stay true to your word when you give it.
- Take care of issues promptly. If and when issues arise in the unit, take care of them as soon as you can. If you can’t coordinate repairs right away, at least acknowledge the situation and explain why there’s going to be a delay.
- Provide appreciation gifts and rewards. As an added bonus, you can provide appreciation gifts and rewards at regular intervals. Even simple gift baskets and holiday cards can make an impact.
While some vacancies are unavoidable, intelligent strategies can help you avoid many vacancies, shorten the vacancies you have, and make the most of vacancies whenever they happen. All these things are much easier to handle when you have the help of a property management company – so contact us to learn more about our services today!
Luis is a dedicated Property Manager at Green Residential, having joined the company shortly after its founding in 2011. Over the years, he has gained comprehensive knowledge of Green Residential, allowing him to effectively assist both our clients and team members. Luis takes pride in his work and finds joy in helping others.
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