Get Creative to Fill Rental Vacancies
Are you building your rental property empire? Or are you hoping to lower your vacancies and grow your revenue? Great goals for property managers in 2019, however, are you opened minded enough to let solutions come to you?
Very often it’s being motivated and taking these matters more seriously that’s required. They are often abstract but by simply opening our minds and getting creative we can get the success ball rolling.
Reminder: Vacancies Might Be Your Biggest Expense
Let’s say you have a vacancy rate you just don’t like and you rarely have renter leads in the pipeline. And one month’s rent loss costs you 8.3% of your revenue. Stretch that to 2 months due to your tenant acquisition channels not producing, and you’re losing 1/6th of your revenue. Then you hear from a prospect that your apartment is not worth the money. Ouch, that’s not good news.
When you’re more creative and effective overall, you create more and consistent demand for your rentals. Each property becomes a portal into your property management brand for higher quality tenants who stay put.
How to Get Creative in Many Dimensions
You have 2 avenues to explore:
- attract new types of renters
- make your property more visible, attractive and increase value to tenants
Getting Creative About Rental Types
3 renter niches you may have not entertained seem to be on the increase — co-living, short term, and fully furnished. Is it inevitable that you’ll have to enter these markets too? Let’s take a look at the opportunity.
Co-living arrangements are generating more interest in ultra-low, dense urban markets just outside downtown core districts such as San francisco and New York. Since rental markets are expected to remain tight, renting out rooms to separate renters could be lucrative.
Homy reports that more new construction buildings are used for co-living so it appears investors believe in co-living demand. And renovation of existing buildings for co-living is common showing further targeting of this type of renter. The top demand is for private rooms, rather than shared rooms. In some cities/states co-living is regulated.
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Short Term Rentals
Renters may be open to short term accommodations, at premium rent prices, as an alternative to not having anywhere to live. The popularity of Airbnb and its high pricing shows this market was undervalued. Investors and builders are seeing the opportunities.
Fully Furnished Apartments
In the short term or temporary accommodation segment, fully furnished apartments are big news. The market is driven by the business sector (employee training and new location development) and by babyboomers who are transitioning from single detached home ownership to renting.
Furnishings might not be as expensive as expected for those with hundreds of properties. The premium apartment rental price you can charge makes this worth exploring further.
Property Quality Attractiveness
Improving your buildings and units not only produces higher rental prices, it attracts a higher quality tenant who is likely to stay longer. By focusing on what renters want, you can renovate and improve how attractive and suitable it is for many prospective renters out there. See what renters want now.
Competing for Higher Revenue Tenants
If you’re in business, competition isn’t a dirty word. Competing means doing more promotion and offering more value (in terms of what renters actually want and need). And promoting online means creating a great website that showcases your properties. You can create a branded theme which makes your apartments seem part of a community rather than isolated units for rent.
Value is subjective and it’s your task to communicate what your apartments are worth to renters.
Getting Tech Friendly
With Millennials becoming the primary renter demographic and with Gen Z hot on their heels, it’s important to use technology. These generations love proptech, and there are plenty of proptech apps and solutions that can make them like your properties and your company. These generations want to be part of an experience that might include eco-sensitive features, smartphone based communications, keyless entry systems, smart appliances, and online services.
Property management solutions which offer online payment, tenant services, fast response, and self-management are increasingly popular. The range of digital, smartphone based apps and services are growing fast so it’s important to investigate how these will fit into your business. Read more about the benefits of using apps and property management solutions.
Problems are sometimes only solved through serving additional market niches, increasing value for tenants, and expanding your services. Any one improvement by itself might not be sufficient. Keep exploring our blog for new ideas on professional and creative property management.
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