How to Avoid Vacancy

Question

If you have professional photos and you're priced correctly, there is no reason to have more than two-months of vacancy between April and September in most of the Twin Cities market.

My number one piece of advice for avoiding vacancy is market timing. I never allow tenants to go month-to-month, and all leases are structured to end between May and July. If I take over a lease that ends outside that window, I'll re-sign for an odd number of months (under or over 12 months, depending on the tenant's preference) to make sure the unit turns during peak renting season.

Professional photos are an absolute must. Most independent landlords still aren't doing this. Spending $250 to save yourself months of vacancy is an incredible ROI. If you have vacancy and don't have professional photos, use the opportunity to take some. I'll watch investors spend $10,000-$20,000 improving a unit, only to take terrible listing photos.

Use virtual staging for a few photos to show off potential layouts, but don't overdo it. I used to virtually stage every photo and realized many tenants viewed it as fake or dishonest. When I switched to having only 10% of the photos virtually staged, calls went up significantly.

Pricing is more of an art than a science. Get a Rentometer Pro account if you don't already have one, but Rentometer can be completely wrong at times. For example, it may not understand the difference between south of I-94 in St. Paul and north of I-94. Your best bet is to get pricing help from an active landlord or broker in the area.

I don't mind optimistic pricing on a nice listing in a good area if it's the first time bringing it to market, because I'd rather test the ceiling than underprice it. If there's not much action after a week or so, I'll drop the rent without hesitation. It's not like listing a home for sale—reducing the rent doesn't usually hurt your leverage.

Different types of units require different amounts of lead time. A higher-end single-family home might rent quickly because relocating families are searching from out of state for something nice and immediately available. Student rentals are often the opposite, as many students secure fall housing during the winter. Make sure you're following local laws regarding how soon a tenant must decide whether they're renewing.

Lastly, avoid vacancy by not buying weird units. Some places are just hard to rent, and it's almost always because they're odd. Any unit will rent if the price is low enough, but I try to think about mass appeal when deciding what to buy.

Hope this helps. If you're struggling with vacancy, feel free to DM me anytime. Always happy to take a look at a listing and give my two cents.

Danielle Daly · Answer

Thanks for the advice Adam - super helpful! Does this also apply to co-living/individual room rental listing as well? I've been struggling lately with higher than usual vacancy rates and am curious if I should have professional photos taken to help mitigate that.

Richard F. · Answer

I have to push back on the mantra of "Professional Photos". For Class B or lower, there really is no reason for this. Modern cellphones are fully capable of taking great pics. You just need to be intentional about taking marketing pics, vs. pics for general documentation.

This means, first of all, the unit is RTR...no tools, ladders, materials sitting around, and certainly no tenant's personal property. It needs to be CLEAN...windows, plumbing fixtures, floors, everything! Absolutely no clutter! Open the blinds, turn on all lights.

"Compose" your shots. You want to tell the story of the home, as you would for an in-person tour, proceeding logically from an exterior full view, into the main living space and on to the kitchen and other areas, with extra views, (possibly more detail of specific elements) of larger kitchens, baths, and primary bedrooms. Views of the back yard are important as well, for people with kids or that like to entertain. Views OF views are very important in many cases.

Once you settle in to a "system" for taking pics, it takes 10, maybe 15 minutes. Done right, done once, you can re-use those pics at next vacancy, and the one after that, unless you make notable changes.

You do need to ensure, before leaving, that all pics are in focus. Sometimes, due to lighting or paint colors, you might need to "lock" your focus to one area or another, but that generally only requires that you touch the area of the image to keep in focus as you have it generally aimed. I always leave flash on "auto", to help even out any difficult areas.

Be consistent in how you move through the unit taking pics, as well as how you compose your shots. I usually am able to take a single pic showing nearly the entire room from the entry by using a wider view, and positioning the camera to allow me to see the perpendicular walls on my right and left. For larger rooms, and to include closet size/locations, simply cross the room diagonally and shoot back toward your first position. With the wide view, you should have much of the ceiling including the central light fixture/fan, as well as much of the flooring, and all 4 walls so you don't leave viewers with questions.

@Drew Sygit, sometimes you scare me. Your comments imply that you DO rent to people site unseen. I have never (LTR), too much potential to end up with a whiner, even IF you took great pics! Not everyone has spatial awareness, so the "feel" of a home can be very different from one prospect to another. I have allowed Parents to "approve" a unit for their college kids, since they were paying anyway, and very occasionally for someone placing an elder parent, but as a general practice, a Hard No. The process was, view it, apply, get screened. I usually advertised "view it today, move in tomorrow" so if someone was looking from out of town, I would just advise them to check with me on arrival, and I would show whatever I had available that day. With around 125 rentals, during peak times I might have a dozen or so, but usually once or twice per year I would have no vacant, RTR units.

Drew Sygit · Answer

I've done the whole progression of leasing; from only in-person showings to now 100% self-showings.

This includes evaluating prospects by:- Timeliness for showing appointments- Vehicle they drive- Peeking in their backseat for cleanliness- Demeanor during showing- What they comment on about the property- How fast they submit documents- Etc.

Does all this matter is NOT the question.

The better question is HOW much does all this stuff matter?

The ultimate measure is tenant performance; both rent payments and maintenance issues.

My experience has been little if any difference.

We do use other tools to replace/offset these things, that we are very comfortable with:)

Drew Sygit · Answer

all great advice!

Adding: Floor Plans - 1-time cost3D Tours

That combo gets us around 35% applications that have never physically seen the property.- Disclaimer: 80% do want to see it AFTER we approve them, before paying our required Holding Fee. Still, way more efficient!