In a market full of properties available for rent, how do you make yours stand out and seem more attractive than the others? What steps can you take to ensure you get it rented more quickly, to the right person, so you can start the inbound cash flow?
In this article, I’m going to outline some simple and inexpensive ways you can get your investment property “rent ready” as soon as possible.
It is so important that you present your property in a clean, safe, and inviting manner.
Remember that people will be looking to make your rental property their own home, so look at it from their point of view and remember the condition of the property on handover is the same condition it must be returned in. You will never get a second chance at a first impression.
Potential tenants are picturing themselves driving home from work, maybe having a BBQ in the backyard, enjoying the idea of relaxing after a hard day’s work. If it’s not inviting or does not look safe and clean, you have other questions to ask: Would the type of person you want to rent from you accept your property in this condition? And if so, how will they treat it?
Pay attention to the following areas before showing your property to prospective tenants.
This is the first impression of a home and will set the tone of how the tenant will view the rest of the property. The gardens should be free of weeds, the lawn mowed, bushes trimmed, and edges neat.
An easy, inexpensive way to make a home look great on the outside is to mulch around the trees and flower beds and even plant some colorful flowers. Color creates a calming and inviting feeling.
Remove any trash or debris from the yard, and make sure there is no mail flowing out of the mailbox.
A clean or new front door and doorknobs create a great initial impression. Make sure the door is not stuck or hard to open, as this is a sign of a lack of maintenance around the property.
This is the most inexpensive thing you can do to give the entire property a “facelift.” There is nothing worse than dark, grubby walls. A coat of paint will immediately freshen the property, making it brighter and cleaner, and the rooms will even appear larger. And most importantly, everything will smell new and clean.
No one wants dirty, stained carpet. So get rid of it, and replace it with new carpet, vinyl, tile, or wood.
Vacuum and mop the floors. Wipe down the kitchen countertops, cupboards, and cooktop. Clean the oven.
Ensure the bathtub and shower are free of soap scum, polish up the fixtures, and scrub the toilet. Replace the toilet seat if it appears worn and used, as well as the toilet flush handle.
Window tracks and sills
Get the vacuum out and suck up all that dust, dead bugs, and all the other debris that gets lost and forgotten in there.
Blinds are very inexpensive and make a world of difference in giving a property a fresh look. You can also replace all light and outlet switch cover plates.
The front, back, and side of the house should be free of trash and debris.
Check that all your bulbs are working so you can turn on the lights for showings. Open all the curtains and let in the natural light—the lighter and brighter a room is, the bigger it feels.
Property management companies use professional cleaners to do this work for a reason—it can take hours of cleaning to get a property up to the standard that it needs to be in for a showing. For this reason, it’s highly recommend you hire a professional cleaner, too.
What tactics do professional property management companies use when it comes to getting their properties leased quickly? It’s quite simple really—there are three things (and three things only) that you need to look at here.
Let’s face it—our smartphones, iPads, laptops, or home PCs are where we spend most of our day and do the vast majority of our research. Tenants looking to move to a new home will head online first to conduct their search. Spend the money to make sure your property is visible on rental sites.
The photos used to advertise your property should be high quality. Most property management companies use professional photographers, and so should you. Their properties will be your competition in getting your property leased quickly.
It may be an upfront cost you’d rather not pay, but these photos can be used for future advertising purposes. Plus, remember that every day your property is vacant, you are losing cash flow.
Love it or hate it, platforms such as Facebook, Instagram, and Snapchat are becoming more and more prevalent in terms of advertising. Always remember that you want to know who your target client is and where they hang out virtually.
Even if you, personally, are inclined to use or not use certain social platforms, this should never inform your business decisions. Social media is free, and it is easy for your contacts to share your posts or even tag people who may be interested.
We both know that you’re going to want top dollar for this property—that should go without saying.
This is a business, and it needs inbound cash flow for this whole thing to work. That only comes from your tenant. If you’ve covered the top two points I discussed above, then you’ve given yourself the best chance of securing a tenant for top-market dollar.
However, just because you want to charge a certain rental rate to pay your own bills, that doesn’t mean the market or the tenant will agree. Quite simply, the market will determine what your property is worth.
Do the research. What are all the comparable houses in the immediate surrounding areas being advertised for, and where does yours fit on that scale? If you’re $50 more expensive than the others, your property is going to sit there for a longer time, losing cash flow daily.
Be open to negotiating. It’s a tactic that professional property management companies use. If the tenant offers a rental rate lower than you desire and your property has been sitting on the market for a longer period than you had planned for, take a moment to consider their offer. It doesn’t make sense to dismiss that when you’ve already lost inbound cash flow in rent.
You can very quickly get to a point that your vacancy loss is more than the whole year’s projected cash flow, and this is where desperation and emotional reactions start to take over—and normally don’t result in a good outcome.
Be realistic about price reductions. Again, you may think your property is worth a certain amount, but every week your property sits vacant, that money is lost.
Let’s run a quick scenario
You’re advertising a property for $2,000 per month. Other comparable properties are $1,800-$1,850. This likely indicates you’re over the market.
Two months later, you still don’t have a tenant and you have lost $4,000 in your projected rent. Even if you then found a tenant at $2,000 per month, your annual income will be $20,000.
If you had reduced your price to $1,850 and filled the property right away, your annual income would have been $22,200. You wouldn’t have been covering the mortgage for two months and would have saved yourself the daily stress of wondering when you’d find a tenant.
You see where I’m going with this? Sometimes it’s less costly to meet the market on price, and it’s also less strain financially and emotionally.
Availability to Show
How often can you make the trip to your investment property for showings if you are not using the leverage of a real estate agent or property management company? What times of the day are you willing to disrupt your home life or business obligations to go show people your property?
Are you available Saturday and Sunday? Are you available before and after work hours?
I ask this because there are certain times that tenants generally want to view properties, and they often call at the last minute to arrange a showing.
Let’s say your property has been on the market for two months, and a prospective tenant calls Saturday during the day wanting to view the property. Are you going to drop everything and drive an hour to show it?
This is where you can use the services of others—real estate agents or property management companies—to alleviate some of the burden. They will have flexible hours for viewings because this is how they get paid. You should also consider smart lockboxes to help get the property shown in the quickest and easiest manner.
At the end of the day, the more flexible you are with viewings and the more people you show your home, the more applications you will receive.
Everyone likes to say no to pets, but those days and that way of thinking are numbered. Aside from the legalities surrounding service and support animals, also remember that some surveys show 60 percent of U.S. households have a pet. By saying no, you knock out a huge demographic of potential renters.
Furnished vs. Unfurnished
I am often asked by investors whether they should lease their property out furnished or unfurnished. There is no right or wrong answer—it comes down to who your target tenants are, how you want to use the property, the location, the current demand for properties in your area, and most importantly, your business model.
Let’s take a look at who is in the market for furnished properties, and how it can benefit you.
Upsides of Furnished Properties
Typically, this tenant will be looking for a furnished property to suit their transient lifestyle. Their company will sometimes sign a 12-month lease for their employee. In this case, having a furnished property is a great opportunity to score a tenant who will be willing to pay a higher rent to move into an already furnished property.
Regular business leases
Companies may have large projects that require people to live away from their home base for extended periods of time. If your investment property is situated in an area where the company needs housing, you could have a great opportunity at hand.
Furnished apartments are a perfect solution for vacationers, students, expatriates working overseas on contracts, or people transitioning living situations during times such as breakups. In addition, with a higher turnover, you have the freedom to change the pricing more frequently to offset vacancy and turn costs.
The main benefit of furnishing your rental property is that it can provide additional returns above the standard rent on a property. People are more willing to pay higher rent for the convenience of moving into a furnished place.
Downsides of Furnished Properties
Let’s look at the downsides of renting out a furnished property.
Purchasing and maintaining furniture
If you furnish your property, be mindful that you will need to monitor your furnishings and ensure your inventory is well maintained. Items need to be replaced promptly if they’re not working properly. Naturally, if you’re going to furnish your property, you’ll have to buy all the furniture and maintain its upkeep over time.
Unfortunately, for every person hunting for a furnished, well-presented rental property, there are probably a lot more young families or couples who need a place long-term.
Vacancy and leasing fees
Generally, unfurnished properties will be longer-term leases with minimal vacancy and wear and tear. With a furnished property and the likelihood of shorter lease terms, usually between three to 12 months, you may need to factor in a higher tenancy turnover. This means an increased possibility of vacancy and more frequent leasing fees.
Advertising, marketing, and taking care of frequent rental viewings will not suit all landlords. Remember that furnished properties also have seasonal rental periods. Be mindful that you need to be able to manage potential cash flow disruptions that can come during the off-peak season.
The Best of Both Worlds: Furnished vs. Unfurnished
If offering your rental property as furnished makes sense for you right now, consider aiming your rental listing this way—target people who not only want a furnished property, but also the other 90 percent of people who don’t want a furnished property.
An easy way to do this is by placing in the ad description: “The house can be furnished for an extra $XX per month.” And be sure to check “Furnished” in the property features.
This way, you won’t accidentally put off tenants who have their own furniture. Include a list of furniture that is available with the house both on the property listing and during rental viewings.
As a landlord, there will always come a point when you’re experiencing some vacancy in your property. This can be costly if not managed properly, and each week without a tenant increases the financial pressure—especially if you have home loan obligations to meet.
Make use of your vacancy periods by inspecting the home and performing any cleaning, repairs, updates, or renovations.
By regularly repairing and renovating your home, you will make it more attractive to future prospective tenants, which will in turn reduce each vacancy period.
Most importantly, make sure you do your research on comparative rentals in your area, and be willing to reduce the price if needed. Professional agents can show your property seven days a week—something to keep in mind as you will need to be flexible with viewing times.
And finally—price, presentation, and pets are key factors when it comes to promoting your property.
What tricks and tips have you used or heard about to quickly fill vacancies in your properties?
Let us know in the comments below!