Beyond the obvious, ‘find a new tenant’, there are a few other things to consider doing, during a vacancy window. Most property owners loath the chore of filling a vacancy but it is a large part of the investment property management list of duties. My personal experience of vacancy in any of my rental units falls about once a year for 1 unit and at times I have gone years without a vacancy. As soon as I receive a notice of rental termination, I reflect on what actions are needed or could be taken at the property location. Here are a few common action items to consider:
- Access the Current Rental Rates— Instead of rushing to relist the rental, take this opportunity to evaluate what you should be charging for the rental unit. Read my post on Determining Price Point and use it as a guide to adjust the rental rate. You will often be surprised to find going rates much higher then your current rental rates, if you have not done this in a few years.
- Update Appliances— My water bills for most of my properties have risen steadily over the past few years due to municipal upgrades and many of the plumbing fixtures are currently inefficient in water usage. Take the time to replace ancient toilets, water hog dishwashers and even shower heads to improve your bottom line. An updated stove or refrigerator will go a long way in attracting new tenants, you would be surprised at how many rental units are showing with appliances a few decades old!
- Accomplish the On-Hold Project— I typically observe a need for an update or complete demolition and update on certain areas of my units, but a quick turn around or a long term current occupancy forces me to shelve the project for now, (at least that is what I tell myself). These larger projects are best done with no current occupants and you can use them to further showcase the rental once completed. One project I recently completed has actually garnered praise from renters, a small 8″x8″ semi enclosed porch that I completely remodeled and enclosed. Now I see renters using it a lot and see cats lounging at the windows of the almost 4 season porch.
- Re-evaluate Terms and Conditions— Once a lease is signed there is no going back on the terms and little room to add to the conditions set forth in the lease. Take the time to re-read the contract and delete or add conditions as your rental experiences dictate. I have a very large Storage structure on one of my properties. In the first few rental cycles I offered it as a shared storage area, but after a few rentals realized that the benefit was not worth the aggravation of trying to manage the shared space and I now exclude its use specifically.
- List the Property for Sale— Typically a property shows best when there is no one currently occupying it and it is all cleaned up. Review my posts on Flipping a Rental Interview and Window Shopping the Real Estate Market for specifics on why this might be a good idea during a vacancy. A short term listing at the current market rate might fetch a tidy profit, just ensure you have a plan to re-invest.
These action items are examples of things to consider before diving right into a re-listing of the rental unit. Most of these action items once accomplished, will either aid in future management of the property or insure you will get a quality tenant for your efforts.