Fall is here and soon the holiday season is upon us. While that brings with it a lot of joy and excitement – it also brings with the most dreaded season for landlords to fill their units. Simply put – people don’t like to move between Thanksgiving and the New Year so renting property can be both difficult and stressful. How to overcome this problem.? Here are some of the different strategies used by seasoned investors and some thoughts from landlords to handle this problem:
a) try not to end in the Fall, but December 31st or mid January is okay, because leasing picks up again at that time.
b) best to wait it out and not take a tenant out of desperation. It will be far worse in the long run.!
c) distinguish the “must moves” from the “I want to move” tenants based on income verification and leasing information (where are they at with their current lease). If they are desperate for relocation, hold off because it is more of a hassle in the long term, but if they legit want to move, try to want them to stay by making some upgrades and improvements. It is better to lose 3 months of rent to keep it vacant than get someone in and evict them down the road.
d) An eviction can cause up to 6 months rent ! Always think long-term ! An option is to lower the rent ($50 max) or wait it out. Each month the tenant pool gets bigger. Starting in March, there will be a lot more people looking again to lease.
e) Keep the 50% rule in mind. No matter how long you’ve had a tenant, save 10% of the revenue for vacancies/evictions/nonpayments & put it into a separate reserve.
d) People always love incentives i.e. a free TV at move in, 1/2 off first month, $25 gift card a month to Starbucks, Target, or anywhere else. Be innovative and creative: pay the tenant’s electricity bill for the first two months of the lease. In the lease, just make sure to cap the amount of the utility to a certain amount.
e) For an annual leases, set the end of the first lease to be June ( + or – one month) to coincide with the school year.
Looking for investment property ?! With 4 offices in the Charleston area, we can manage your investment property and handle all tenant issues. Feel free to contact me to discuss what you are looking for. I can be reached at 843-345-2625 or mailto: firstname.lastname@example.org