6 Ways Residential Landlords Can Reduce Vacancy Rates in 2021
Reducing vacancy rates has always been a top priority for landlords, as nothing kills the bottom line more than vacancies. But with eviction moratoriums looming because of people losing their jobs from COVID-19-related lockdowns, landlords need to reevaluate whether they even want to reduce vacancies. After all, if they can’t evict, what protections do landlords have from tenants who break lease terms? California, for example, is on my radar because of recent discussions to extend eviction moratoriums to January, not 2021, but January 2022.
So in these unprecedented times, you might wish to first evaluate whether you wish to continue being a landlord in the area you’re currently in: Why put a tenant in your unit if they can stop paying rent and you might not be able to evict them for an entire year? If you live in such a state, you might want to move your business to a locale with laws more favorable to landlords.
That said, here are six ways to reduce vacancy rates in 2021.
1. Offer a longer-term lease
A lease term longer than the standard 12-month lease, such as a two- to five-year lease, is risky for both landlord and tenant. But it could be the answer to help you reduce your vacancy rate. The upside of a longer-term lease is you won’t need to worry about tenant turnover after only a year. But the downsides are being stuck with a tenant you’re unhappy with for a longer period and not being able to increase the rent until the lease term is up. Here are ways to mitigate these risks.
Reduce the risk of a bad tenant
The key to reducing your risk of being stuck with a tenant you’re unhappy with is to conduct a thorough tenant screening process. Besides using a service that performs a credit check and background check, you’ll want to call the prospective tenant’s employer to find out about the applicant’s job security (if the employer will tell you), past landlords, and references.
Not being able to increase the rent
If you don’t like the idea of not getting a yearly rent increase, you could put a clause in the lease stating the rent will increase by a certain percentage after 12 months (or whatever timeline you choose). Such a clause, however, might defeat the attractiveness of the longer term for the tenant, making the strategy backfire. If you have a good tenant in your rental property and can get them to stay longer than a year, it might be worth it to not get the yearly rent increase.
2. Market your property when people are looking
There are cycles to the rental business. It’s generally more difficult to get long-term tenants during the fall and winter than in the spring and summer. Of course, this depends on your area, but that’s the general rule of thumb. So make sure your properties come up for rent when you’re most likely to have the greatest number of applicants.
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