All property owners wish their rental property was occupied by a tenant 365 days a year every year. It's unlikely that you'll get there, but by employing methods to lower your vacancy rate and reduce vacancy loss you'll get as close to that dream as you possibly can.
Finding tenants to take over a lease is no easy feat, so often you need to be smart with picking the right tenants and keeping them to reduce your vacancy loss.
Finding tenants to take over a lease is a major struggle for landlords. In fact, 52% of owners who come to us have untenanted properties.
By following our tips you'll take steps to keep your rental property's vacancy rate at a minimum, thereby maximising the returns on your investment property.
So, we’ve broken it down for you – 9 tips that will help you to reduce your vacancy rate. So, you don’t have to endure a negative cash flow a minute longer than you need to.
1. Keep your tenants happy
Maybe the easiest way to reduce your vacancy rate is to hold onto the tenants you already have!
Keeping a tenant for the long term is all about keeping them happy. The happier they are, the more likely they will renew their lease.
If you want an in-depth explanation on how to achieve this, you should read our article 5 Tips for Happy, Long-Term Tenants. But, in a nutshell, this is what you should do to keep your tenants for the long term:
- Stay on top of maintenance
- Be responsive when your tenant reaches out
- Upgrade your property with features tenants want
- Respect their privacy
- Be proactive with lease renewals
2. Get better at lease renewals
By mastering lease renewals you'll significantly reduce your vacancy rates and loss on your rental property.
Again, it's the fancy trick of keeping the tenants you already have instead of wasting your energy finding new ones.
When the end of the agreement is in sight, just giving your tenants enough time to think about whether they want to renew will show that you care about their interests. Being a considerate landlord can make all the difference.
You might also try getting your tenant to extend the lease term at a reduced rate. Like going from renewing every 6 months to renewing every year. And sure, reducing the rent may seem counter-intuitive, but it can really be worth it if it means keeping quality, long-term tenants.
3. Keep your rent competitive
Now, you might be hesitant to drop your rent. But remember, it’s all about striking a balance between maximizing your rental return and minimizing your vacancy rates. Shaving even $30 off will go a long way in securing a cash flow faster.
Reducing your rent by a few bucks a week will always be better than extended vacancies.
Something many owners forget is that when you've conducted a rental appraisal and found the sweet spot, it's not just a one-time thing. What might be competitive rent one year may be greatly underpriced the next.
That's why it's so important to scan the market every time you look for a new tenant unless it's only a few months apart. That way, you're always attracting quality tenants who will stick around.
If you want to know all about keeping your rent competitive while your property is on the market, read our article on when to reduce the rent on your property advertisement.
4. Use proven property marketing strategies
So how do you put your best foot forward to find tenants fast and keep your vacancy rate low? The answer lies in effectively advertising your rental property.
In our previous article on making your rental property stand out in a competitive market, Leigh Patrick explained how you can keep your vacancy rates at a minimum. She broke it down into 3 must-dos:
- Invest in renovations tenants truly want
- Get professional photography for your rental property
- Upgrade and repair your property with preventative maintenance
Getting in a professional real estate photographer who knows what they’re doing when it comes to angles and retouching is a wise investment in itself .
If you want to know more about this in-depth, including which renovations are smart investments, head to our guide on making your property stand out.
5. Stay on top of compliance
Now imagine you’re a prospective tenant. You’ve just walked through the front door and the first thing that hits you is the rancid smell coming from a damp carpet. There are cobwebs around the windows, marks on the walls, and dust on just about every surface. There’s no way you’re staying in the place a minute longer, let alone pay to live there
Moral of the story: having a clean, well-presented property is essential, and it's all about having a habit of staying on top of compliance.
A well-presented property will also have the effect of attracting high-quality tenants.
Being in general good at staying on top of paperwork and having all documents in check will signal to your tenants that you know what you're doing and that you're a responsible individual.
Sure, staying on the good side of jurisdiction is a plus, but it also has the added benefit of keeping your vacancy rates low.
To do this you can check out our new tenant checklist, which has all the items you need to complete before and when you bring a tenant on board.
6. Know where to find tenants online
When talking about the best place to find tenants, you can’t go wrong with Realestate.com.au and Domain.com.au, the superstars of property websites. Both receive millions of monthly site visits. Plus, they don’t skimp on the vetting when it comes to background checks - so you know you’re in for high-quality applications.
Getting your property on there will net you higher quality tenants faster, and will greatly contribute to lowering vacancy rates.
The only catch is that you need to be a licensed real estate agent to advertise on these sites.
Our recommendation for you DIY owners out there is to use Rent.com.au. Just like Realestate.com.au and Domain, they have a rigorous process of verifying prospective tenants and help filter out low-quality applicants, all while boasting high traffic on their site.
But if you’re looking for your rental needs that extra bit of exposure, you can always hop onto Flatmates.com.au and Flatmatefinders.com.au. These sites actually allow you to view profiles of prospective tenants:
- how old they are
- where they want to live
- how much they want to spend
- how long they want to stay
- employment status
So rather than waiting for tenants to reach out to you, you can be the one to take the initiative, and fill your empty property sooner.
The only downside is that, unlike Domain and Realestate.com, these sites don’t conduct background checks. So, you may be in for some lower-quality applicants. Just keep your wits about you and use our tenant selection guide while searching.
7. Thoroughly screen prospective tenants
As much as you might want to fill your property ASAP, you also need to make sure you’re not leasing it out to some unreliable characters. The last thing you want is to sign on a tenant only to have them leave a few months down the track. You’ll just have to start your search all over again.
Some simple things you can do to vet prospective tenants are:
- Check their rental history
- Contact previous landlords
- Check the tenant database
- Verify proof of income
- Ask why they’re moving and how long they intend to stay
If you stick to this checklist, it should be pretty easy to spot any red flags. Remember, the goal is to find a tenant for the long haul, lest you feel the sting of the vacancy.
You can head to our tenant selection guide where we provide some useful resources and more detail about picking the perfect tenant.
8. Start looking for a tenant at the right time
So your tenant has chosen not to renew their lease, meaning you’ll soon be faced with a vacant property and a big hole in your bottom line. Understandably, the question on every owner's lips will be: “When should I start looking for a tenant?”
The right time to look for a new tenant is a good mix of what the law says and what the market says.
Say you’ve already had a tenant in your property for a while and they’ve come to you saying they’re moving out. In this case, you actually have to wait a bit before you can start finding tenants to take over the lease. It's a bit annoying, we know, but that's just how it is.
So, when should you start looking for a new tenant?
The best times to look for a new tenant are in January and February, followed by May and June. This is because that is when the largest amount of leases end (think 12-month and 6-month leases). As a result, those are the points of the year where there are most tenants browsing for new rentals online.
Apart from that, you want to have your property advertisement up 6-8 weeks before the current one ends. It gives you good time to hold viewings without being so early that no one is going to be interested.
Just keep in mind that some states have specific legislation on when you can start looking for a new tenant. For example, in NSW you can only hold viewings 2 weeks before the tenancy agreement ends, with reasonable notice.
By looking for tenants at the right time you'll get the highest possible amount of interest in your property, and keep your vacancy rate at a minimum.
9. Get a property manager
By using a property manager you get your property listed on realestate.com.au and Domain, which are the two best places to find tenants.
What's more, is that they'll be able to give you some good ideas and tips for improvements you can make to your rental.
All of this contributes to lower vacancy rates for you and higher returns on your investment property.
Property managers charge a relatively small fee for all the time they help you save.
That being said, some property managers are a clear cut above the rest, so you need to make sure you get a good one.
Use our guide for finding a good property manager before you sign up with anyone, to know the things to look for and questions to ask at an interview.
Want more content on property management and real estate?
Subscribe to our FREE quarterly newsletter for the best property content on the internet!
Disclaimer: The information provided on this blog is for general informational purposes only. All information is provided in good faith; however, we do not account for specific situations, facts or circumstances. As such, we make no representation or warranty of any kind whatsoever, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information presented.
This blog may also contain links to other sites or content belonging to or originating from third parties. We do not investigate or monitor such external links for accuracy, adequacy, validity, reliability, availability or completeness, and therefore, we shall not be liable and/or held responsible for any information contained therein.