Vacancy rates are in many ways what define the success of your investment property. If your vacancy levels remain high for an extended period of time then it is likely that you will be losing money. There are many different factors that can lead to high vacancy rates just as there are specific things that can be done to lower them.Currently, there are some laws around rent increases, but none for rent decreases, which is really just common sense. However, lowering the rent may affect your building’s performance for a long period because it will take you a lot of time to get back up to the regular rent, depending on which province you’re in and what the rent increase laws are. This is why lowering rent is an option that should be studied carefully before pulling the trigger.
On the other hand, choosing to leave a unit or two vacant for a few months to get the rent you want rather than lowering your rent and have your building full can’t be justified from numbers perspective either – it’s a paradox. You need to consider what will have a greater impact on your investment You also need to make sure you understand all the factors that will play a role in your decision, like the market rent average in your area (neighbourhood), what the competition is doing, and how well you are maintaining your units and building.
Other ways to keep your building income on a healthy level include offering different incentives and changing them each month to learn which work the best for you. At the end of the day, you need to sit with your a property management company in Edmonton to make a plan about what you want, and what can practically be done.
Want to learn more? Read: What are the Differences Between a Resident Manager and a Property Manager and Behind Braden Equities Inc. – Meet Braden Paquette.
Here are 5 simple ways to lower vacancy rates without lowering your rent:
- Keep things looking tidy. Think of it in these terms: where would you want to live, somewhere nice and neat, or a place that looks like it needs spring cleanup throughout the year? If the common areas of your rental are not nicely maintained, it will give people a horrible first impression, and likely scare them away.
- Charge the proper rent. Have a look at online ads for other apartment buildings on your area. If you have been having a hard time finding people to stay with you long-term, it could be possible that you are overcharging. Correcting this by even $50 per month can have an immediate and noticeable impact on vacancies.
- Offer renter’s incentives. This could mean something as simple as offering a discounted month of rent for signing an extended lease. Even a few dollars a month could be enough to encourage someone to agree to a long-term commitment. Another way to lure tenants is to offer free or partially free utilities, such as water or electricity.
- Don’t delay repairs. Although this may seem like a simple concept, the nature of property management is that things will go wrong at the least opportune times, making it very tempting to put things off. This will only lead to a snowballing effect in which the end result is a massive bill all at once. Additionally, repairs can save you money in other ways (like installing new windows to save on heating).
- Advertise your rentals vigorously. This is a major factor in having all of your spaces rented out. Keep in mind that technology now plays a huge factor in finding tenants. If you are advertising online then you are headed in the right direction, but if you are still relying solely on print and newspaper, you may want to try another technique.
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Braden Equities Inc. has been successfully managing apartment buildings in Edmonton since the 1970s. A lot has changed since then, but our commitment to the residents living in each building we manage has not. Contact us today.