You might feel tempted to pull out all the stops when trying to fill a vacant rental property.
Don’t.
Even if it takes a little longer to find a good applicant, it’s worth the extra time you may need to seek out a high-quality tenants. That said, it doesn’t necessarily mean you can’t offer incentives if a property has been sitting vacant for more than a few weeks and it helps you close a deal on a good resident. Just do so with the big picture in mind.
Should You or Shouldn’t You Offer Incentives?
There’s evidence to suggest that incentives do stir up interest in the applicant pool, but there are a few things to keep in mind before doing so.
- The money that goes toward the incentive is coming out of the owner’s pocket. Before offering it, they should thoughtfully consider how it fits with their overall investment strategy.
- The property management company must remember to credit the resident per the incentive. This can easily get overlooked if it’s not part of the normal operating procedures.
An Alternative to Incentives
Examples of incentives include waiving the application fee or offering a free half- or full-month of rent with a signed 12-month lease. These can be effective, but an alternative we generally encourage to our clients is to lower the monthly rent until we get to a price where the property leases.
Setting rent rates on a vacant property can feel tricky, but it’s important to list your units in line with market conditions. In the end, the resident who signs the lease will be much more likely to stay in the unit longer because they appreciate that the unit accurately reflects current rental market conditions, and they aren’t getting what might feel to them like a bait-and-switch.
Pricing rental properties requires knowledge of the local market and a good understanding of the kind of tenant you’re trying to attract. If you’re considering investing in real estate in the greater Columbus area, we can help. We manage hundreds of properties throughout Franklin County and keep a close pulse on changing marketing conditions. Call us today at 614-725-3059 to ask your questions.
