From vacancies and repairs to evictions and mortgages, owning an investment property comes with its challenges and rewards. Vacancies are probably the biggest nightmare for an investor, not only because they are costly, but also because a short vacancy can feel like forever.
The problem with vacancies is that it dries up the source of income, leaving the investor with no money to pay monthly expenses including taxes, mortgages, utilities (operational capacity), and insurance. During this time, investors have to think about how they can market their property or consider lowering the rent.
1. Extra Incentives
The first step to dealing with vacancies is offering added perks to renters to make the property more appealing. Owning an investment property comes with a price, and sometimes there’s a need to take detours when things aren’t going as planned.
For example, including utilities in the rent, or offering free utilities, is considered a perk by some. Offering paid utilities can attract new renters at a time when you really need to fill vacanices.
2. Consider Changing Your Prices
When owning an investment property, it is important to learn flexibility when it comes to pricing throughout the year. During the high season, it is perfectly normal to spike up your prices a little bit to make more money because of the high demand. During the off-season, it is advisable to push your prices below average if you are struggling to find new tenants. After all, it is better to break-even for a short period of time than to have negative-cash flow.
3. Consider Short-Term Rentals
If you normally rent your property to long-term tenants, then maybe you should use a new strategy. If you have a vacant property, then it is time to try Airbnb rentals as a different approach. Airbnb offers daily or weekly or even monthly rentals on its platform. That allows your property to become an option for short-term renters who are looking for cheap accommodation. This way you’re able to make some money in the meantime, while looking for full-time tenants.
4. Improve Your Leasing
When owning an investment property, gradually, as an investor you will get accustomed to the rental patterns in the area. This means you should learn how to market the property to your niche market.
Some owners are set in their ways and would rather ride out the storm than change the rules or standards they have. In that case, investors should start thinking about making major deductions in the expenses they pay monthly.
Try these things to reduce the costs of a vacant property:
- Turning off the water heating system can save you a lot on your electricity bills
- Installing a home security system is advisable because a vacant house that is inhabitable for long-term is susceptible to robberies or thefts
- Maintain your property by visiting whenever possible to check on the appliances, garden, plumbing and any other repairs needed
Using Mashvisor’s analytics calculator, you will get a predictive analysis of rental prices and more importantly, estimated occupancy rates for that particular property. Having vacancies is just one of the risks with owning a rental property, but these strategies and tools help eliminate vacancies or at least lower the cost of your vacancy period.
A vacancy situation can almost get depressing. Yet, there are many incentives or deductions that can made that will limit your losses for that time period. However, owning an investment property means you should be prepared. Hopefully, an investor is not experiencing vacancies because of a poor property. Understand your market, tenants and the strengths of your investment property to avoid the dreadful task of managing vacancies.