When your investment property is vacant, your pocketbook feels the pinch. Even if you’ve purchased in a prime location, with a very low vacancy rate, it’s possible to find yourself without tenants from time to time.
As a savvy investor, you’re not going to panic, however you are going to ring up your property manager and find out what is going on.
Let’s say your property manager says she’s doing everything within her power to let your property, but nobody’s interested.
Is this true? Perhaps, but why not find out for yourself what might be going on.
- When was the last time prospective tenants were shown the property? If your property manager is not showing your investment property on a routine basis, you’ve likely found your problem. If she is showing it, continue your search.
- Is your investment property getting good exposure or is it getting “lost” among the crowd?
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If necessary, widen your search for tenants, eg advertise on the internet (if you’re not already), put a sign up in the front yard and/or take an ad out in national (rather than just local) papers.
Still no luck? Get more creative with the following ideas:
Let’s assume you’re renting the investment property for $400 per week. A rent reduction might not be what you’d like to consider, however weigh up the costs associated with no rent as opposed to some
Here’s how it would work:
For a six month rental - assuming you dropped the rent by $15 per week, you would sacrifice about one full week’s worth of rent over the six month period. Which is better; giving up one week
or one, two or more months
Bump that up to a full 12 months rental and you lose out on two weeks’ rent for the year. Or, you could offer 2 weeks free to cover moving costs - an appealing offer, especially to young families.
Obviously, you’d want your property manager to fully vet prospective tenants to ensure they have a history of long tenancies.
Can’t afford - or don’t want to give up rent money? No worries...put in a little “sweat equity” and offer an amenity such as free lawn mowing.
Another option is to spruce up the property with a fresh coat of paint or new window treatments.
For more ideas and strategies designed to help you move forward in your wealth creation goals, come along to our next Property Investor Night.
At this FREE, information packed event
you’ll hear lots of great information about where the growth markets are and how to safely and effectively structure your portfolio to weather market lows. We look forward to seeing you soon!
Sam Saggers is CEO of Positive Real Estate and Head of the buyers agency which annually negotiates $250 million-plus in property. Sam's advice is sought-after by thousands of investors including many on BRW’s Rich 200 list. Additionally Sam is a published author and has completed over 2000 property deals in the past 15 years plus helped mentor over 2200 Australian investors to real estate success!
Read more expert advice articles by Sam
Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.
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