Thank you to everyone who has been emailing us. We've been getting some thoughtful questions too like this one…
How can I make sure I always have tenants or buyers for my properties?
Nobody wants to get stuck with an empty property that isn't bringing in any income.
I'll share you with my best tips but if you make sure you always have nicely painted and well-maintained units you'll always have prospects knocking on your door. But you also have to be realistic. You will have vacancies from time to time. Even the most beautiful apartments in your market have vacancies. The important thing is to be realistic about it and anticipate it.
A quick search on Google.com will give you the vacancy rate for apartments in your market. Generally speaking, it's about 5.0% so you'll want to include that in your Cash Flow Formula. You may even want to double your estimate just to be safe. This means that at any time during the year, you'll have a 5-10% vacancy rate. But if you account for it in your Cash Flow Formula you can still cover your losses while a property is vacant.
That said, one of the benefits of investing in low- and moderate-income markets is the fact that the neighborhoods tend to be far more stable than other markets. There's a socio-economic category of people who live in those types of neighborhoods. These are the communities where they grew up and where their friends and family live so it's very likely they will in the same communities their entire lives.
The following are some of my best tips to filling a property and keeping it filled.
1. Promote the property while you're fixing it up. While you rehab a property, post a sign in the front yard advertising the fact that you have a unit for rent. I often kept all the doors and windows open while rehabbing a property to make the property more inviting to others walking or driving by. In many cases, people would come in and ask about the work I'm doing.
2. Advertise! Advertise! Advertise! Put up a sign in the front yard that simply says, “House for Rent” or “Two-Unit Apartment for Rent” and then list the features that will grab the attention of prospects and get them to call. Include the number of bedrooms, bathrooms, features that you think will help sell the property such as new appliances, air conditioning, access to public transportation, etc. and be sure to include the rental pricing and your phone number or a website to learn more. Also, put ads in the following media outlets: Local newspaper, Penny Save or shopper magazine and Craigslist.com. These are all free to list to the properties and are the top 3 sources for people looking to rent a property.
3. Network at your local landlord association meetings and real estate investment clubs. These meetings are some of the best places to find other investors who may have lists of buyers and renters in your area. These meetings are also a great opportunity for you to find out what's working and what's not when trying to fill a property.
4. Post your ads on bulletin boards at grocery stores, in public libraries, at post offices, at local convenience stores and wherever else you may be advertise for little or no cost. This is one of my oldest tips but it continues to work even in our digital age.
Still, nothing beats referrals. And the best way to get referrals is to make sure your properties are always in great shape. I always make sure mine are painted and well maintained.
If a tenant called about a leaky faucet, I got it fixed. After a while, I earned a good reputation as the guy who had the best units for low- and moderate-income rental units. As a result, tenants told their friends and family about my other properties. In many cases, I usually had a waiting list so renting a unit was never a challenge.