Rental properties are only assets to landlords who are actually generating a profit. If your property is vacant for weeks or months at a time it digs a deeper hole for you financially and eventually becomes a liability. The cost of the mortgage, property taxes and maintenance essentially comes out of your pocket making it a waste. Ideally, investing in marketing and attracting prospective tenants is the only way to find resolve.
Marketing your rental property to tenants, however, is a lot more than just posting a few pictures and crossing your fingers. If you’ve tried to lease your rental unit to no avail, it’s quite possible you’ve made one or more of the mistakes listed below:
You Forgot About The Aesthetics
The city or state might approve of a unit being ready for rent as long as it is up to code, clean, safe, and qualifies as a residence, but you’re going to need more than that to attract tenants. Sure, renters want to live in a clean, safe, and decent environment, but they also want it to look nice. If you’re having a hard time getting renters to lease your investment property, consider investing more in the appeal. Here are some suggestions:
Painting - An easy way to spruce up a rental unit is to paint the entire unit. Try to keep the colors neutral so the tenant can easily match decor and furniture to it.
New Flooring - Flooring is another easy way to fix up your rental. You can consider cleaning existing flooring or installing something new. Pulling up old carpets and putting down inexpensive tiles is a great way to attract renters.
Appliances - Appliances often come with rental units and add convenience for tenants. If the existing appliances are out of date, consider upgrading them to newer, more energy efficient ones. They often have more advanced features and save the tenant money on energy costs.
Landscaping - If you were to drive past your rental property, would you be inspired to inquire about the inside from looking at the exterior? Terrible landscaping ruins the curb appeal of a property. You can spruce things up with some wildflower seed mix, a few potted plants, and clean-cut grass.
You’ve Priced it Too High
Your rental property is supposed to generate a profit (or at the very least cover the expenses of managing the property). Yet, pricing it too high could result in you having a unit vacant longer than you’d like. When it comes to determining how much rent to charge, you can use factors like:
Know State Limits - Before deciding on how much you’ll charge for rent you need to have a clear understanding of limitations that may have been set by the city or state your property is located in. If there are caps on how much you can charge, you’ll need to stay within those limits to avoid legal ramifications.
Know the Area - How much do you know about the area your property is in? What benefits or perks do the tenants receive for living in your property? Is it near downtown? Close to a beach? Near public transportation? A great school district? Lower crime rates? Use these to factor your price.
Know the Competition - Lastly, consider the competition. What are other rental properties designed similar to yours going for? Check out a few and try to price yours at a comparable rate.
You’re Requirements Are too Strict
The idea is to find a tenant that can afford the rent, will respect the property (and rules) and has a good rapport, but when you make tenant screening requirements too strict, you ward off potentially great tenants. If you’re not getting anyone to inquire about your rental unit, perhaps you’ve gone too far in the following areas:
Move in costs - If you’re charging a high price for rent and then asking for first, last, and a month and a half deposit this may be too much for a tenant to come up with. Consider reducing how much you ask for upfront.
Credit - Though using credit history as a means to determine the reliability of a tenant’s payment history you shouldn’t set the bar too high. Often tenants are looking for a place to rent because they cannot afford or don’t have the credit to purchase a home. If there’s an applicant who had poor credit but has shown over the past 3-6 months that they’re improving, you should consider cutting them a break.
House Rules - You want to protect your rental property, but if a resident can’t feel comfortable or free to do as they please it pushes them away. If you have clauses that include no kids or no pets, for instance, but your rental is located in a family neighborhood, you might want to consider lifting these restrictions.
If you’ve placed a rental property on the market but haven’t gotten any real inquiries in the past few weeks or months, it’s likely because you’ve made the mistakes listed above. Investing more in the aesthetics of a property, pricing it competitively, and making your applicant requirements more realistic can change things for the better.