Do you have a lot of vacant units but don’t know why?
Landlords have a myriad of factors to consider to maximize the returns on a rental business. Whether it’s one single-family dwelling, a duplex, or a whole collection of units in a complex, units sitting vacant is the last thing any landlord wants. Too many for too long can be disastrous for the business.
According to data from TransUnion in the period covering 2014 to 2017, rent growth outstripped income growth by more than 200%. Wages have been stagnant since the late 70s, barely keeping pace with inflation, and making renters feel the stress of keeping up, which means landlords have to be very careful of the rent they charge.
Of course, selling the property is another option, if you’re leaving the business entirely, but let’s not throw out the baby with the bathwater. Less drastic solutions may be the answer.
What happens when the rent is set too high
- When the rent is set too high, rental property stays vacant a long time, but the costs of maintaining it don’t stop, especially in winter. Dallas Uptown landlords are generally luckier than their counterparts in Minneapolis or Milwaukee, but many of the buildings here are less insulated, and recent weather extremes could burst pipes or strain HVAC systems as the heat keeps turning on and off and the temperatures roller-coaster up and down.
- Empty units in certain areas can invite other forms of trouble. Fewer people lighting up windows can invite vandalism, opportunistic crimes, even squatters. Coin operated laundry machines are less productive and more prone to theft, making the entire building less attractive to potential renters and less desirable for current renters to stay put.
- A super-villain may use your empty unit to set up a hidden lair from which to run his nefarious schemes, or a band of marauders may set up their base and raid surrounding apartment buildings. (Okay, this last one is certainly an exaggeration, but you get the point.)
How to know you set the rent too high
You should regularly do a little math to know your vacancy rate. If you only own one or two single-family dwellings, this is something you can ballpark in your head, but it’s more complicated if you have a lot of apartments. The number to aim for is ten percent or less. Vacancy is a factor of more than just the rental price, though.
The surest way is to do a rental analysis.
A rental analysis will collect information from many sources and compare your properties with substantially similar properties in the area to determine how your rents compare with the competition.
Struggling? If you have units sitting empty for more than a month or two, that’s a lot of money out of your pocket. Or is the time and attention needed to market your rental too much of a distraction from your other endeavors? Hire a professional property management company to manage the property for you.
- They’ll help you set the perfect rent rate, as well as use their marketing expertise to fill empty units and keep them full. They don’t get paid on vacancies, so they’re motivated to fill them.
- They take care of screening applicants and all the related headaches like credit and background checks.
- They take care of maintenance requests and track everything to keep you on track and tenants happy and not thinking of moving.
Uptown Dallas Properties can provide you with a free rental market analysis to get you on the right track. Click here to get started.