Commercial Real Estate Blog

All of my apartment buildings and rentals properties are located in Victoria, BC, a city with extremely low vacancy rates, 3% on average. My family’s company owns and manages about 400 units in the city. If our properties had the city’s low vacancy rate of 3% then we would have about 12 vacancies at all times. That might sound great to some people, but the truth is, we never have vacancies! We even charge higher rents then all our competition. So how do we do it? Read my 6 tips below and I guarantee that you can rent out more apartments and lower your vacancy rate.

1.    Advertise Your Rentals Aggressively

This is the most important factor to renting out your apartments. You have to be savvy and aggressive in your marketing efforts. If you’re still listing your vacancies in the local newspapers classified section you’re probably just wasting time and money. I’ve run tests and found that print advertising barely gets any response at all.

Your main advertising focus should be marketing your rentals online. The most effective website to advertise your rentals is craigslist. If you have apartments to rent you should be listing them on craigslist as often as possible until you have them all rented. You should also list each of your apartment buildings or rentals properties on google places and bing local. These listings never expire and can often get you lots of direct traffic from search engines. If you have more than 100 rental units, I highly recommend having your own website that is search engine optimized.

2.    Take Great Pictures of Your Apartments

Most apartment hunters won’t bother checking out ads that don’t have a picture, they just move on to the next one. Posting a picture with your online listing is necessary and you should post as many pictures as possible. Crappy pictures will just deter anyone from visiting your apartment so make sure that they make the rental look as good as possible. You should only take pictures when the apartment is empty. Never use pictures of your apartment when it’s filled with the current tenant’s furniture. I highly recommend hiring a professional photographer, that’s what I do. I pay $45 per suite for professional pictures and trust me, it’s worth it. He makes my apartments look big and bright (notice the picture on the right seems much large and brighter than then one on the left. It's the same room!). My apartments actually look better in the pictures than they do in person, but that’s ok, because it gets the potential renter into my building for a showing.

3.    Show Your Apartment

The more showings you do the faster your place will rent. When it comes to showing apartments and selling, everyone has their own style. What works for you might not work for someone else. However, there are some common sense tips that will help anyone. Before your showing, you should take a few minutes to walk around the common area of the property to make sure everything is in order. This will give you the chance to clean any messes before your potential tenant arrives. Things like scattered flyers blown around the entrance of your building will give your potential tenant a bad first impression. If the apartment you’re going to show is still occupied and you know it’s a mess, you should always warn the potential tenant before walking in. If possible, arrange to show them another similar but tidy apartment in the same building and assure them that you will repair and/or clean the messy apartment so it will look like the clean one. If it stinks, go inside a few minutes before your showing and spray some air freshener. After you’ve shown the apartment hopefully your potential renter wants to go ahead and rent it. Now you need them to fill out your application form.

4.    The Rental Application Process

You have to process rental applications fast! This is one of the most important rules in renting out apartments. As soon as your applicant leaves your building they will be apartment hunting again. The best thing to do is to process rental applications on the spot, right after they fill it out and before they leave. My main factor for approving rental applicants is their credit history. In my experience, you can often rely on a credit score alone. Generally, someone with good credit is a responsible person that will be pay rent on time and someone with poor credit will have a high risk of paying rent late or eventually not paying at all. You should process credit checks instantly. To do this you will have to set up your own account with a credit check company. Be aware that many 3rd party credit check services don’t get you results instantly, which can be the difference between signing a new lease or not. Once the application is approved it’s time to collect your deposit. If the applicant doesn’t have the deposit with them and they don’t have a car you should offer to drive them to the bank so they can make a withdrawal or get a bank draft. That way they won’t have the chance to change their mind or take more time to think about it.

5.     Waiting Lists

Another easy way to rent out more apartments is to keep a waiting list. I used to think this was a waste of time, after all, why would someone “wait” to rent an apartment in your building? There can be many reasons. Maybe your building is located close to their work or to their parent’s house or your building accepts pets when others in the area don’t. Whatever the reason, it only takes a moment to add their contact info to your list and it can be an easy lease in the near future.

6.    Tenant Retention

Now that your apartment is rented you need to keep your new tenant there for as long as possible. Implementing a simple tenant retention program can be an easy way to reduce move outs. Start by leaving new tenants a letter or send them an email a few days after they move in welcoming them to your building and asking them if everything is satisfactory with their suite. Follow up with them every 6-9 months to make sure everything’s ok. The idea is to let them know that you want them to be happy with their suite and that you’re available to resolve any problems or perform any needed repairs. Tenants often experience some sort of minor problem that they never report. The tenant eventually moves out and mentions the problem during the move out inspection. “You should have a look at the kitchen sink, it’s really clogged and I haven’t been able to do the dishes for the last couple of months”. Or “There’s a mouse problem in the suite and that’s why I decided to move out”. If you were aware of the problem and fixed it, the tenant may not have moved out when they did. Don’t contact tenants more than every 6 months or it may annoy them and do more harm than good.

Takeaways

There are many factors to maintaining a low vacancy rate, but the 2 main things you should concentrate on are advertising and response time. You have to market aggressively and you need to respond to emails and messages from prospective tenants fast (within one hour) and process rental applications right away.

What do you do to lower your vacancy rates?