What makes a happy landlord? Well, there are probably many things that would make the “top ten” list. Since we have been landlords for over 10 years, I would say that the #1 way to have a “happy” landlord is NO vacancy.
It is actually pretty simple.
Tenants = Income. No Tenants = No Income.
Hi, everyone! Liz is back this week to discuss this incredibly important topic of leasing units quickly! This is a “hot” topic for our team at DeRosa since I have been in the process of training someone new on our team to be our leasing agent. We currently manage over 100 units and have about 8 vacancies. I have been training her and teaching her our process. We decided to give her 2 buildings (4 vacancies) to start with. As a result of this process, we have been re-evaluating how we do things and how we can make improvements!
Here are the three steps that you can follow to ensure you lease your unit within 30 days.
3 Surefire Steps to Lease Your Residential Unit in 30 Days
1. Know how your unit differs from the competition.
I was just chatting with a seasoned investor the other day. I asked him, “How do you know a buy/hold is a good deal?” He told me it is all about the numbers. I probed deeper and asked, “Do you ever ask the question: Is there a strong market for these rentals?” He said he does ask himself this, but always evaluates the numbers first.
It is not that I disagree with hi;, however, this conversation really made me think about something. Way too often investors are only focused on the numbers and don’t consider other important “marketability factors” with rentals. It is imperative to answer these questions about your unit before you buy the property and certainly as you prepare to market the unit:
- What is the market for this unit?
- What is my ideal tenant for this unit?
- How can I find the ideal tenant?
- What are the biggest selling points of this unit?
- What are the challenges I am going to have with leasing this unit?
- Is there a work around?
- What are the solutions I can tell prospective tenants?
Remember, you can go into a unit and fix it up beautifully. You can put granite countertops in the kitchen and hardwood floors throughout the unit. However, if the apartment only has one closet, there is only so much you can do about that. There are things you can change in an apartment and things you cannot change.
The key is before you begin marketing your unit, you need to be crystal clear how your unit (or units) differs from the competition. I can’t stress enough how important market research is. This might seem obvious; however, it is not always done (even by seasoned investors).
2. Price your unit accordingly.
This one might seem fairly obvious; however, if the pricing for your unit is off base, this will slow down your leasing process.
Here is what MOST investors do: They do some basic market research about the area, find out that 1 bedrooms in a particular area are renting for $850 (for example), and then market their unit at the same price.
I hate to tell you, but you need to go much deeper than this to ensure you are pricing your unit correctly. Most investors don’t compare “apples to apples.” You also need to compare many other items. Remember, if a prospective tenant is coming to see your place, they probably have two or three more appointments right after yours to go see other places.
Here are some items to compare:
- The amenities that are/are not included, such as laundry on site, storage, parking, etc.
- The square footage. There are some spacious 1 bedrooms and very small 1 bedrooms. This will affect marketability and price.
- The floor number where the unit is located. Most prospective tenants prefer the first floor.
- The utilities that are/are not included.
- Whether there are newly renovated features of the unit. Does your apartment have stainless steel? New carpet? New features?
- The different communities within the same geographical area.
For example, we have a lot of rentals in Trenton, NJ. This is an urban community for those who are not familiar. There are many different sections of Trenton that command different rental pricing. It is imperative to compare communities within towns/cities for pricing differences. The pricing can change from community to community.
Bottom line, you need to be able to answer the question, “How does your unit compare to the competition?” The primary reason you want to do this research is to price your unit correctly. Additionally, you can also use this information as you “sell” the unit to prospective tenants.
3. Create and follow a solid process for marketing and follow up.
Like I mentioned earlier, we manage over 100 units. We need processes and checklists to ensure we are running our business efficiently. Remember, leasing a unit is like selling anything else. It requires a TON of follow up, relationship building and follow through.
I thought it might be helpful to share our process with you. Our process, by the way, begins when our construction team gives the unit the “ready to rent” stamp. This is not a physical stamp; however, once the unit has been rehabbed and cleaned, they give the “go ahead” to begin marketing the unit.
The first checklist we created is the “Marketing Checklist.” This includes every step that is needed to be completed from beginning to completed application. This includes everything from checking to see if we have enough keys made, to listing the property online and offline, to the application process. We also created a form called “Unit Fact Sheet.” This document is completed by our leasing agent (with the help of our office team), and the purpose is to have all the facts of the unit in one place. That way, the leasing agent can begin marketing the unit.
Also part of the “Marketing Checklist” is taking high quality pictures and a video tour of the unit. You don’t need to be a professional photographer; however, you need to take pictures that “sell” the unit. Always take pictures from the corner of the room – this helps show the most space. Also don’t forget to take pictures of the outside of the building. Prospective tenants need to know what the building looks like.
Once you have listed the unit in various places (online and offline), you will begin to receive calls and emails! Our goal is to follow up with every lead (via email and phone) within 3 hours. Prospective tenants appreciate prompt follow up.
As we call people back, we conduct a brief phone screen. You want to answer any questions they might have, but you also want to tell them your rental requirements, etc. The last thing you want to do is waste their time or yours showing them the apartment when they are not even close to meeting your rental standards.
We then schedule open houses twice a week. We schedule these once on a weeknight and once on a weekend. The key is to funnel all interested parties to these open houses. I always make these for one hour (not two hours). I like to tell everyone to get to the unit at the same time. It is both time efficient and it creates some healthy competition.
I would also add that it is VERY helpful to capture data during this leasing process. Listed below is what we are starting to capture for each vacancy. It is important to capture this data, so we can evaluate what is working/not working in the future.
- Date unit is listed
- Number of calls/emails did we receive for the unit
- Number of attendees to our open houses
- Number of applications
- Number of approved/declined applications
After each open house, we follow up with all of the attendees the next day. Follow up is absolutely key in this business. With regard to the application, make it easy for the prospective tenant to complete it. We now have a way for prospective tenants to pay the application fee on our website, and then email/scan the completed application. That way, it expedites the process. The leasing agent is responsible for getting the completed application (with pay stubs, etc.) into the office, and then the office runs credit and evaluates the application.
Have any other suggestions, tips or strategies that I am missing to ensure you fill your vacancies in 30 days?
Thanks, as always, for reading and commenting!