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Jun 15 '09, 11:01 AMIn light of declining rental rates, increased concessions, rising HOA dues and a tighter money supply most property owner's initial reaction is to raise rental rates and lower approval standards to make up for increased expenses. This is a recipe for disaster. Aggressive marketing, thorough screening, realistic pricing, and prudent management are the keys to developing strategy that will minimize losses.
No tenant is better then a bad tenant! Property owners should continue to maintain their screening standards. Tenant screening at a minimum ought to include: credit analysis, national not just local criminal background checks, employment verification, rental history verification, eviction check, bankruptcy search, and asset verification if applicable. At the end of the day, this increased screening can be completed for a relatively small investment of time and money and could save an owner thousands of dollars.
In addition to screening, property owners also need to perform regular inspections. We recommend quarterly inspections by a handyman. Inspections can help prevent major repairs, deter tenants from improper maintenance, and help identify tenants who are causing damage sooner rather then later.
"The biggest losses come from tenants destroying the property". This common misconception is perhaps one of the most commonly held. According to our vast market statistics and experience, vacancy and collection loss is the greatest factor in poor net operating income. Pricing a unit even $100 over-market could cause you an additional 6-8 weeks of vacancy loss not to mention additional advertising expenses. We recommend pricing your rental home at or slightly below your competition. This coupled with flexibility, diligent checking on competitor pricing, and a quick reaction to changes in price will ensure lessened vacancy and collection losses.
Synergy Real Estate presently manages over 400 individual properties in SW Florida. We have been able to maintain an eviction rate of about 5%; the State average is 7.80%. Furthermore, as of January 1, 2009 we have leased homes 17% faster then the market average.
