There are a number of different strategies available
When it comes to having success in the residential real estate investment space, it can come as a result of a number of different strategies. Having options and alternative ways to accrue income in this industry is a staple of successful investors. Very few calendar years have seen significant changes in the market like we have witnessed in 2022. Due to this uncertainty, it has forced the hands of many investors to increase their adaptability and seek out new opportunities that can lead to profitable investments.
The strategy that came to the forefront in 2022 is long-term rentals for single family properties. This property type is less risky than a multifamily due to size and price point and the long-term rental aspect allows for investors to secure passive income over a long period of time. This route doesn’t come without its challenges as investors will have work to do when it comes to securing and retaining tenants. Finding the right people to live in your investment space and enticing them to stay for multiple years is the clear-cut route to ensure success. Here are some tips to keep in mind for investors looking for solutions when it comes to attracting tenants for their long-term rental property.
With the first tip, we can talk exclusively about attracting potential tenants for your single-family rental property. One of the best ways to go about this is to make sure the listing and display of the property has that professional touch. Just walking through your property and snapping quick shots with your cell phone might not be the best recipe for that eye-catching aspect that initially attracts potential tenants to want to view a property.
The cost of hiring a professional photographer will be mitigated once a tenant is in place. With their vision and understanding of staging and lighting, a savvy photographer can turn any average room into a studio. Even displaying what a tenant could potentially do with a room would be a smart idea to pique their interest when it comes to renting.
Angles, time of day, natural vs. studio light, etc. are all aspects of a good shoot that can make or break whether a tenant wants to proceed. Posting these pictures and using them on sites such as Zillow can make a noticeable difference. When tenants are comparing photos online and see the stark contrast between your property and another building, the professional photos are what could make the difference. It is often overlooked, but this tip could come in handy more often than investors think.
Rent ready unit
Next up is a straightforward tip, but still worth noting when it comes to attracting and retaining tenants in the real estate investment space. It’s also a chance to remind investors that working this caveat into their investment strategy when they are looking to rent out a property is crucial. This idea of a property being “rent ready” is significant because when prospective tenants are looking for places to live, this a key deciding factor that could lead them to choose another property.
If a property needs significant repairs, isn’t all the way finished, or the work that was completed was subpar, then it may not be a property worth investing in. Additionally, if an investor wants do rehab to a property before renting it out (which is a popular strategy) then this will serve as a reminder to not cut any corners when completing that work.
Tenants want to come in and envision themselves living in the space and start thinking of plans they have for each room. If there is a lot of rehab work that still needs to be done or if its not done correctly that is an immediate red flag for potential tenants and usually a deal breaker. On the other hand, a completed property that has been cleaned and polished and there is no hint of any work that needed to be completed to turn the property into what it currently is, there are usually offers flowing in following a showing that very same day.
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This next tip isn’t always an easy one to rely on as a landlord or property investor, but it sure does help attract tenants, especially ones that are on the fence about moving in. First, having private amenities that potential tenants can take advantage of without leaving their home is a huge bonus. Up to date appliances is one of the first eye-catchers. A new oven/microwave/fridge combination is an easy way to win over tenants that have a family right off the bat. Knowing that they’ll have top of the line appliances immediately gives tenants a sense of pride and has them ready to show off their new residence. Some other amenities include a washing machine and dryer in unit. Taking away the hassle of a laundromat or a shared laundry space is a big relief for tenants.
Finally, if investors are lucky enough to secure a place with amenities such as a swimming pool, back deck, fire pit or even a home gym, they’ve hit a home run. These private amenities can take an average investment and bump it up to a must-have. Tenants will see these and want the house immediately and may even overlook some shortcomings elsewhere on the property if they know they’ll have these to take advantage of.
As for public amenities, having a list ready to rattle off at each showing will be important for landlords as they try to seal the deal. This list can include a good school district, access to public transportation and local parks, or even a booming downtown area with shops and restaurants depending on the age and interests of your tenants. When it comes to amenities, its important to know exactly what your tenants will want to take advantage of. Selling them on aspects that are nearby locally but not directly related to the property is a tough skill but a worthwhile one to add to your repertoire as it will aid you in attracting and securing tenants for years to come no matter the property.
Open line of communication
The last tip to cover when it comes to strategies that will attract and retain tenants for investors is the communication and attentiveness shown to the tenants. Having this communication may seem like an unnecessary step if the property can speak for itself, but it’s the personal touch that goes a long way with renters when it comes to saying yes to a property or renewing the lease. Making them feel like a person rather than a tenant is a huge key for renters to be more comfortable in the space and give them more pride in living there. Having an open dialogue, being responsive and following through on needs that your tenants express is the above and beyond aspect that gets noticed by renters.
In the initial stages of a potential tenant deciding on where they want to rent, a landlord that is attentive, responsive and on time has a substantially better chance of securing that tenant over someone who is not. Even if the property isn’t as nice as others on the market, this is an area where an investor can make up ground so to speak. Being flexible when it comes to scheduling a showing, discussing potential requests in the contract, and detailing why this is the place for the potential tenant are all areas of communication that get noticed and appreciated.
This communication can continue when it comes to repairs or maintenance requested by a renter. Being able to talk with them in the same day and working towards a solution will have the tenant feeling like you are on the same team. In contrast, getting back to them days later and not knowing about the problem or the solution is a cause for concern and will have the tenants considering where to move next. It can also help when the lease is ready to be renewed. Investors can site specific times where they were amenable, attentive and took care of the tenants at every opportunity.
Rent going up is just a part of the business, but if you do your job as an investor and landlord, you can stand firm with your request to increase rents at a fair rate. The flipside to this is that you may not even get an argument from your tenant because that communication and attentiveness was right where it needed to be and the increase in rent seems fair to a tenant because they can depend on their landlord and are comfortable where they’re at.
Attracting tenants and being able to secure them for years at a time is the best security blanket to have in the real estate investment property industry. So many people try their hand in this space due to the fact that the passive income is so appealing and can be such a boost to their professional and personal life. However, these tenants are the key to that passive income, and they don’t come easy. Investors must ensure that their property looks appealing and is well displayed online and in person. Those first initial reactions from a tenant are everything and an investor can win a tenant off of those emotions alone.
Having perks in and around the home are a huge bonus but communication is the biggest key. Being a responsive investor/landlord is what separates a short stay from a tenant maybe only lasting months to a long-term stay where a landlord could see consistent rent rolling in for at least 3-5 years before tenants move on to their next location. All these skills will help investors gain and attract single family rental tenants for years to come and allow them to have success in the industry.
Source: Mortgage Professional America