Managing your vacancy rate is one of the most important things you can do to ensure success as a property owner, and there are several factors that can affect this metric. Broadly speaking, we can generally distill them down to a few common categories.
We’ll discuss each of these categories and their associated strategies in more detail throughout our next several blog posts, so stay tuned.
To hear more from us about how to reduce vacancies in your rental properties, you can also watch our webinar replay on the topic.
How Quality of Tenants Affects Vacancies
Any conversation involving rental property vacancy must also include a discussion about tenant screening. The quality of residents you get in a rental property makes a big difference in your likelihood of getting a vacancy, so it pays to have a thorough yet fair tenant screening process in place.
When we’re screening residents, there are numerous factors we look at when determining if we’re going to approve an applicant. We call them the “Big 5 Criteria” and they include:
- Credit history – The correlation between an applicant’s credit history and their skip and eviction rates has been studied extensively, and there is strong evidence to suggest that using one’s credit report can be highly predictive of their future ability to pay rent on time month after month.
- Criminal history – We want to make sure we’re not placing someone in a rental property who could be a danger to other people in the community or building.
- Eviction history – Someone who has recently been evicted is likely not going to be a good resident.
- Rental history – We talk to the applicant’s current and previous landlord and get confirmation that they were indeed a good tenant, paid their rent on time, didn’t leave with a big balance, or didn’t damage the property in any significant way.
- Income – We verify income by looking at pay stubs and bank statements. To qualify for a specific rental property we manage, the applicant needs to show a combined monthly household income of at least three times the cost of rent.
If you’re trying to reduce rental property vacancy, paying very close attention to the quality of tenants you approve is an important strategy to help you achieve your goals. The better job you do at screening tenants, the more likely the residents will stay in the property for the long run, and that will reduce your overall vacancy rate.
To learn more about owning and managing rental properties in the greater Columbus area, please get in touch with us at RL Property Management.