This blog article was contributed by Onerent, a rental leasing, and management service for the modern owner and renter, managing over 13,000 properties across the San Francisco Bay Area, Greater Seattle, Los Angeles, San Diego, Phoenix, and Las Vegas.
Rental real estate is an excellent long-term investment that can give you a steady stream of passive income. But the reality is, it isn’t as easy as it may sound.
At the very least, you must have a good grasp of the rental market in your locality. This knowledge can help you to come up with strategies on pricing and make your listing stand out from others.
Despite this, many owners still find it hard to fill in their vacancy. Avoid the following pitfalls below that make your property hard to rent.
Pricing Above Market
After putting in your hard work and resources into your property, you might think your rental is the best one in the neighborhood. But this belief can influence you to price your rent above market, discouraging qualified prospects who are likely not willing to pay more than the going rate.
To help owners come up with a competitive rent price, our CMO Chuck Hattemer wrote this advice in the guide “How Much Can I Rent My Property For.”
‘’Property owners need to detach themselves from the emotional value of the home and approach it from a purely financial point of view.’’
Some property owners price their rental using the expense method where they add up costs such as mortgage, insurances, property taxes, utilities, among others. Say all these total to $1,000 a month, then they could come up with a rent price of at least this amount.
The expense method, however, can work both ways. Depending on the true market rate, it could either make you price your rental above-market or below market.
A rental home priced too high drives away potentially good prospects, leading to longer vacancy and increased vacancy costs. If you price it too low, you end up losing rental income every month of the lease.
To come up with a competitive rent price, it would be best to price your home at market rate.
Start by looking at rent prices of nearby homes similar to your property. Use this for a comparable rent analysis and find the average rate—this forms your baseline in setting a fair market value for your rental.
The downside to this is that it takes time and effort to drive around and search for rentals within a couple of miles or more from your property—not to mention calling the owners or agents to get the rent prices. This is why most homeowners avoid doing it.
Onerent helps property owners set the best rental price for their property at no extra cost. Using historical pricing data, Onerent analyzes rental trends and comes up with the most competitive rate, taking the burden off the shoulders of property owners.
Listing Cannot be Seen by Prospects
If your listing is getting low to zero views, you must be listing on rental sites not frequented by renters. Onerent lists on the most popular sites such as Zillow, Craigslist, and Trulia which are renters’ default sites when looking for a home.
You can also improve your listing’s traction by advertising on more platforms and in social media. Onerent takes the extra mile to advertise also on Apartments.com. HotPads, Facebook Ads, and even utilizes its professional network in the real estate industry.
The bottom line is this: the more sites you advertise your listings, the more prospects will see it and the more showings it will generate, increasing the chances of filling in your vacancy fast.
Listing Photos are Mediocre
You might insist that photos of your property look acceptable enough, but if the prospect’s first look at your home is through average-looking photos, it won’t inspire much interest.
More often not, these photos are taken using the handiest camera around—a smartphone, resulting in poorly-lit photos that are sometimes taken at bizarre angles.
Onerent recommends the following to help owners get the best photos for their listings:
Marketing Strategy is Off
If your property remains vacant despite having done all of the above, take a look at your marketing strategy.
Does your ad have a catchy title that accurately describes your rental? Are you using words that add value and did you avoid using red flag words?
Describe your property using appropriate adjectives (like homey, spacious, cozy, sunny) and avoid using words that could paint a negative picture of your property (like cosmetic, needs TLC, as is). Don't forget to mention the location, number of beds and baths, and relevant public utilities like nearby restaurants, bus stop/train station, parks, or school.
Are you getting the wrong type of prospects? If you’re getting inquiries from prospects who do not meet your tenant qualification standards, refine your strategy. Make it clear in your ad what you’re looking for by setting the right criteria. This will help set the right expectation and filter out those who will not qualify.
Showings are not Hassle-Proof
Do you make it easy for prospects to book a showing to your property? Is it easy for them to find a schedule to visit your property to see if it fits their needs? If prospects need to invest a lot of effort to view your home, it will likely get less showings than you hope for.
Give your prospects more house tour options and make it convenient for them. Onerent Home Tours make leasing faster and easier for both owners and renters. Our on-demand house tours allow them to easily find a schedule that works for them.
Onerent’s Self-Tours give prospects the convenience of viewing your property any time within 7 a.m. to 8 p.m., any day of the week. This gives them the flexibility of touring after work hours or at any time they are available. They can also opt for a guided tour by simply booking a showing online.
If they are located out of state or in another country, they can still view a Onerent home remotely using our 3D Virtual Tours. If they fancy the home, they can easily apply through our online rent application.
Wrong Time of the Year
Seasonal patterns have a significant impact on the behavior of the rental market. While people move year-round, there are months where it peaks and months where it drops.
Moves tend to be at the lowest during wintertime and dramatically increase from March to the 3rd quarter of the year. While there are those who start searching for homes at the beginning of the year, they normally move much later than usual.
Your property might remain empty if you’re marketing during the rental market’s lean season. Avoid putting your property on the market during the lean months. If it’s something you cannot help, opt to offer rent discounts and other promos to entice prospects to your property.
Avoid these pitfalls to help you fill in your vacancy fast. Being a rental property owner may not be easy, but engaging the services of a reliable and professional property manager like Onerent will make it a worthwhile experience for you.
Onerent offers free real estate education and resources on the Onerent Blog. Find answers to all your legal, maintenance, finance, and leasing questions as well as real estate news that affects the housing market.