Our country has never really faced a pandemic such as the one we are facing now. So the way we have handled things in the real estate and property management industry in tough times in the past will not work today. When the economy takes a nose-dive, we need to take steps that will allow us to reduce vacancies and protect our portfolios.
Since the tried-and-true methods are not an option, what can we do? Well, there are two things that you need to keep an eye on: filling current vacancies and reducing the chance of creating more.
Monitor the Market
When the economy changes, you will eventually see a change in the rental market. Be sure to occasionally check the rental prices in your area so that what you are offering coincides with what is currently available. Keeping your rent at a set rate while others are dropping can be detrimental to your business. And, not taking the time to perform this audit may result in longer vacancies.
Cutting Your Costs
You may feel pressure to cut your costs when the economy goes sour. And, it sure seems like a logical thing to do. But, here’s the deal – when you have vacancies that you want to fill, cutting your advertising or marketing expenses will not help you get the job done. In fact, it could end up costing you more in the long run as your units will remain empty.
Offer Discounts
We don’t typically promote offering discounts on rent, but hard economic times brings a different scenario. Not knowing what the future may bring is something that can deter people from wanting to sign a new lease. After all, the initial amount due to move into a new rental can often be steep. In uncertain times, people want to hold on to their finances rather than spread them around – even when it comes to moving into a new place.
Offer a discount on rent for the first month – or the first couple of months. Or, consider offering to split the security deposit up over a set number of months to further reduce the amount due at move-in. Taking these steps can attract those who are hesitant to take the leap.
Entice Your Current Tenants
If you have tenants that are approaching the end of their lease, reach out to them to see if they will stay – even if they have already given their notice to vacate. A downturn in the economy is not always foreseen or prepared for, so circumstances can change dramatically. And, let’s face it – the cost of moving can be hefty.
You may consider enticing your tenants to sign another year’s lease by:
- Offering a small renewal bonus, whether it is a discount on the first month’s rent, a gift card for the local grocery store, or the like.
- Creating a payment plan for those who are struggling. Showing that you are willing to work with them can entice them to stay.
- Providing an upgrade. Whether it is fresh landscaping, a new appliance, or an outdoor patio set, providing something to the tenant to show that you appreciate them.
Economic turmoil happens, but it doesn’t have to halt your business. Instead, you simply have to move with the flow and make changes when necessary to reduce vacancy at every turn.
