How to Prevent Vacancies When Starting a Rental Home Business
When starting a rental home business, one of your top priorities should be preventing vacancies. A vacancy can cost you money in lost rent and damage to your property. It can also be a major headache, as you’ll have to find new tenants and undergo the screening process. Many landlords make the mistake of thinking that they can just put their property on the market and wait for tenants to come to them. However, this is often not the case.
Fortunately, there are some measures you can take to prevent vacancies. By following the tips below, you can keep your rental homes filled with happy tenants.
1. Screen tenants carefully.
The screening process is one of the most critical steps in preventing vacancies. You should check each applicant’s credit score, employment, and rental history. You may also want to require a background check. This will help you weed out any applicants who are likely to be troublesome tenants.
When interviewing tenants, be sure to ask questions about their rental history. Find out why they’re moving and whether they’ve ever been evicted. If they have, find out the circumstances surrounding the eviction. The more you know about a tenant, the better your chances of having a successful rental relationship. Avoid renting to anyone who seems unstable or has a history of not paying rent on time.
2. Make sure you are in an ideal location.
Convenience is key when it comes to preventing vacancies. Tenants are more likely to renew their leases if they’re happy with the location of your rental property. If your rental home is in a desirable neighborhood, close to public transportation, and near amenities, you’ll have an easier time keeping it leased.
When buying a land property for your rental business, consider the location carefully. It’s also a good idea to research the surrounding area to see if any planned developments could impact your property, such as a new highway or shopping center. This information can help you make an informed decision about whether or not to purchase the property. Don’t forget to factor in the potential for appreciation when choosing a location for your rental home business.
3. Set competitive rents.
To attract and retain good tenants, you need to set competitive rents. Research the rents that other landlords in your area are charging for similar properties. Then, set your rents at a similar level. If you charge too much, you’ll have trouble finding tenants. But if you charge too little, you may lose money on your investment.
A good way to determine an appropriate rent amount is to use the one percent rule. This rule states that you should charge one percent of the purchase price of your property in rent. So, if you paid $200,000 for your rental home, you would charge $2,000 in rent. This rule is a helpful starting point, but you may need to adjust your rental price based on the market in your area.
4. Keep your properties in good condition.
Another way to prevent vacancies is by keeping your properties in good condition. Tenants are more likely to renew their leases if they’re happy with their living conditions. So, promptly address any repair needs and keep the common areas clean and well-maintained. You want your tenants to feel like they’re living in a comfortable and safe home.
If you have problems with repair requests, consider hiring a professional property manager. A property manager can take care of repairs and maintenance and handle the day-to-day tasks of being a landlord. They can also screen tenants and collect rent, freeing up your time. Just be sure to carefully vet any property manager you’re considering hiring.
5. Be responsive to tenant needs.
It’s also important to be responsive to tenant needs. If a tenant has a maintenance request, do your best to address it quickly and courteously. Tenants who feel like their concerns are being heard are more likely to renew their leases than those who feel ignored. Many landlords use a tenant portal to communicate with their tenants. Your tenants can use this portal to post announcements, collect rent, and track maintenance requests.
You should also open up lines of communication with your tenants. Let them know that they can come to you with any concerns or questions they have. You can do this by holding regular meetings, sending out monthly newsletters, or posting information in a common area.
6. Offer incentives for renewing leases.
Finally, you may want to offer incentives for renewing leases. Some landlords offer discounts on rent or free months of rent as an incentive for tenants to stay put. Others provide gift cards or other prizes for renewing leases early. Offering incentives gives tenants an incentive to stay put—and it can help prevent vacancies down the road.
Preventing vacancies is an important part of running a successful rental home business. By considering these tips, you can help keep your properties occupied and your business thriving. Always remember that happy tenants are key to a successful rental business. So, do what you can to make your tenants feel comfortable and valued. With a little effort, you can keep your rental homes occupied and reduce the risk of vacancies.