You have a great property. However that doesn’t mean you’re immune to bad luck with tenants and increased competition When you are having a problem and possibly bleeding money, a discount or incentive can sometimes help speed up the tenant search and reduce the negative financial effects of vacancies.
The benefit of filling your space may very well be worth some added expense. However make sure you first do a cost-benefit analysis making sure adding an incentive won’t make your ROI too low or in the negative.
Here are some techniques to consider.
- Offer incentives/discounted rates: Evaluate your current ROI and the rent offered by your competition. Compare the costs of offering a monthly reduction against those of an extended vacancy and your holding costs. Do you have the room to lower your rates if it means signing a tenant more quickly? You could also, instead of a rent reduction, reduce any extra fees ( for pets, for maintenance etc. ). Also you can negotiate with your property management company and see if they will work with you on their fees. Ask us!
- Consider a longer or reduced lease term. Some tenants are looking for shorter term lease. While this is not best case scenario for owners it certainly brings in income instead of siting vacant. The point of an extended lease is to keep your renters making regular contributions to your business. Keep an eye on your local market and any proposed tax changes to assess the risk of settling into a longer-term agreement. While you’ll receive less money for your unit, it may prove more consistent and reliable down the road.
- Be Flexible: Offer some flexibility with your terms to find new tenants who may be perfectly great renters but need this flexibility that other landlords lack. Pet-friendly homes are enticing to animal lovers searching for a place that accepts their furry friend. You eliminate about 60% of population not allowing pets. Adding flexibilty with regard to decorating may win some prospective tenants over. You could add an early lease termination clause. This is appealing to some as it gives them degree of freedom not offered from your competitors.
- Offer upgrades or 1st month free: You see the free month oftentimes offered by apartments and it can be a great incentive since security deposits are also required at the start of the lease. It is better than sitting empty.
Call Carolina Living Real Estate. We have a great track record of keeping our owners properties rented!
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