The idea behind making money with rental properties is a simple one: find good tenants that pay every month. As straightforward as this may be, it is not as easy as it sounds. The demand for rental properties has never been higher. Because of the increase in competition, landlords need to think of alternative ways to find tenants. Not only do they need to find tenants, but to maximize their return they need to think outside the box. No longer is it enough to put an ad online and wait for their phone to ring. If you are looking to find tenants or get top dollar for your rental, here are five things you can do:
1. Fully furnished rental: One of the first things you can do to generate interest is to furnish your property. Showing an empty property doesn’t always put it in the best possible light. By furnishing your property, it gives prospective tenants an idea of what it would be like to live there. Additionally, depending on your neighborhood, this could make it much easier for them to move as well. In low income neighborhoods or areas dominated by students, a furnished unit makes much more sense. Little things like kitchen items, vacuums, microwaves and wall décor can put your unit over the top. You don’t need to furnish the entire property from wall to wall; sometimes even minor furnishings have a big impact. With the right improvements, you can increase your rent anywhere from 10-30% a month. With a quality couch, desk and dressers, this could be just a one-time expenditure. If you are looking to get top dollar for your rental, think about furnishing it from lease to lease.
2. Updates: If a fully furnished unit is something that doesn’t appeal to you, there are other options. One of those items is to selectively update some areas that may be lacking. Little things like flooring, paint and walls can have a big impact. Going a step further and updating the appliances, including the washer and dryer, will make your property stand out from the crowd. Regardless of the area, tenants want to live in a place that feels like home. Modern updates will give them this feeling. In much the same way that you would consider furnishing an investment, the same is the case with updates. You can get a quality refrigerator for just a few hundred dollars. If you keep this for five to ten years, you will make your money back after the first year or so. The most important aspect to remember with updates is to know your market. Not all updates are created equally. You can do more harm than good if your updates are not in line with the rest of the homes in the area. A custom wall unit with a large flat screen TV sounds nice, but won’t offer the return you are looking for.
3. Small concessions: Depending on the demand from renters you may have to make some concessions to generate interest. You are not going to give away the farm but you should know when to give a little. If you have an otherwise strong applicant but they want you to remove the snow instead of including it in the lease you should consider it. This may be against your policy and will definitely eat into your bottom line but consider the alternatives. You could spend weeks looking for a new tenant they may not be as good as the one you currently have. Making concessions for good tenants is a trade you should make all day. Even little things such as parking concessions or offering a small gift certificate for five consecutive months of timely rent payments are a good trade for you. If you are going to make these concessions when pressed you should consider offering them up from the start.
4. Study local competition: The only way to know what is happening in your market is by doing your homework. Go online and read every listing in your market. Get the weekend editions of your newspaper and see what they are offering that you may be not. Ask your real estate agent for rental listings that are similar to yours. If you do this you will get an idea of what price you should charge and what items you should include. Price and demand changes from year to year. You should never just assume that things have remained the same from the previous year. If you want to get top dollar you need to know how your property stacks up to everyone else in your market. Dig in and spend some time researching your competition.
5. Advertise year round: You never know when or where you are going to find a quality tenant. Instead of waiting until you are 30-45 days to lease end you should advertise your property year round. Even if you are six months out put the property online and get some feelers. It is far better to have a handful of interested people to choose from than to scramble around at the last minute. Social media is a powerful tool that you should use to your advantage. A post or two every month should give help generate some interest. Interest leads to demand and if the demand is high enough you may be able to get a bidding war and that will increase your rent price.
Getting top dollar for your rental means doing everything you can to attract interest. If you are struggling to find new tenants or you are trying to maximize your price, follow these five steps.
