Filling Vacancies In Your Buy & Hold Properties
By Paul Esajian on February 17, 2014
As a landlord, your rental experience is usually solely based on the quality of your tenants. If you have a tenant that pays on time every month and takes care of your property, you will probably think being a landlord is a breeze. Conversely, if you are having trouble filling vacancies and your last few tenants have been a nightmare, you will loathe the experience and look to cut your losses as quickly as possible. What you do in the time leading up to the end of the lease will go a long way to dictating how the next nine to twelve months will go. Moreover, the more efficient your rental business, is the better your investing business will be.
Your first objective is to make sure your property is filled and generating cash flow at all times. Every month that you have to dig into your own pocket to pay the mortgage and utilities is a setback. You need to walk the fine line between just filling the vacancy and getting the best possible tenant. Most landlords do not give themselves enough time to look for tenants at the end of the lease and are left scrambling. Give yourself a good six to eight weeks to fill your vacancy. The longer out you do so, the better chance you have of finding the right tenant.
The first move you should make is to start with your existing tenant. See if they have any interest in staying in the property. In most cases, they may have wanted to stay but didn’t know that it was an option. If they want to move on, you can ask them if they know of anyone who would be interested in the property. You can entice them by offering a gift card or something else of value for their troubles. If they were a good tenant, the odds are they will bring in someone similar to them. Either way, finding a new tenant from the inside out will save you time and effort in your search and start you on the right path.
If you have to look outside your tenant, you have a few options you can take. You should start with the free or inexpensive methods like Craigslist, social media and bandit signs in your front yard. While these may be effective, you need to give yourself a cutoff date to move on to something else. You can’t just wait for people to call you if you are under 45 days. At that point, you can try local newspaper ads, fellow investors and maybe even a blast email to local realtors. You should also ask around at local REIA events and networking groups to see if anyone is interested. If you wait for people to call ,you are at the mercy of your tenants. You need to generate as much possible interest so you can choose among the best possible candidates.
One vacancy can change your entire perception about the business. In most cases, this is the landlords fault and not due to a missed payment. Give yourself plenty of time to find a tenant and if you have to try alternative methods of advertising you should do so. The more efficient your rental business is, the better your investing business will be as well.