The rental market is much more volatile than most people assume, the reason being that ONLY the currently vacant units determine the market. In real estate sales, the sales price of the house down the street, the one that sold last month, determines your property value. The rental market has no such system. Tenants are only comparing your rental to other properties being advertised at the same time. At any time, your market area could become competitive. That’s why the quality of your advertisement becomes very important.
Follow these five tips to help you create a competitive listing:
Take detailed notes about the features of your unit
Take the time to walk through the property with a checklist and notepad—the more details, the better.
At a minimum you should have notes about the
energy efficiency upgrades
average utility costs
public and private schools, etc.
Pictures matter. Don’t skimp on the number you take or on their quality
First, is your unit “camera ready”? Assuming your turnover repairs & cleaning are complete, there are just a few things to do before you start snapping pictures.
Turn on all the lights and open all window coverings for natural light.
Close all toilet lids and turn on any gas fireplaces.
Remove all debris and keep your things (keys, purse, notepad) out of the shots.
Put some thought into your pictures and try different angles and brightness.
Don’t forget to take pictures of the neighborhood, parks, nature areas, and anything else nearby that tenants might be interested in.
When you post your best pictures on your listing, put them in the same order as you would walk through the unit. You should have at least one to two pictures of every room.
Don’t assume you know the market rent; do a market analysis every time
It’s not as technical or difficult as you may think. Essentially, you just act like you’re a tenant looking for a unit like yours in your area. You should try to find at least three comparable rental units.
Create a table to list all the important information about your unit like the square footage, bed/bath count, quality of finishes, utilities included in rent, etc.
Then, next to that column, list all the same attributes from your comparable units. You may need to make some adjustments if any properties have better or worse attributes. You should be able to get an average dollar amount per square foot per month from all the comparable properties or at least see a small range of rent amounts. Then you can decide where to price your unit based on how competitive you want to be.
If you aren’t seeing the activity you want, try refreshing your market analysis with new comparables. After a week or two, the available units you are competing with may be completely different.
Choose your words wisely
When it comes to fair housing and discrimination, a landlord can accidentally get in trouble. Violations can lead to fines and lawsuits in the tens of thousands of dollars. The main rule when wording a rental advertisement is to focus on describing the property and the facts about it.
Don’t describe how it is ideal for a type of tenant. For instance, if you want to highlight the nearby grade school, don’t say something like, “Ideal for families with young children because it is two blocks away from XYZ elementary.” Instead, say something like, “Two blocks away from XYZ school that ranked in the top 10 percent of area elementary schools.”
The first way says who the property is ideal for. The second way lets the tenants come to their own conclusion. Stick to the facts and let the tenants decide if it is good or bad for them.
There are way more terms to avoid than I can list here, but here are some examples of potentially problematic language: Families, children, mother-in-law suite, no students, adults only, traditional couple, mature, empty nesters, etc.
Get it published
It sounds obvious, but this last step also deserves some thought and possibly even a little money. Five years ago, 75 percent of the tenant leads my management company (www.IRCEnterprises.com) received came from free sites like www.craigslist.com. In the last couple of years though, we have seen a shift towards rental listing sites like www.zillow.com, www.rent.com, etc. Now we receive about 65 percent of our tenant leads from these sites and only 20 percent come from free sites like Craigslist.
You may want to consider listing your units on sites like these even if it costs you a little. The more tenants that see your listing, the faster it will rent. It’s worth it to look at premium listing services too, as some sites will automatically post your listing on other partner sites, giving you even more exposure.
Marketing your property is something that really pays dividends if you take it seriously. No matter what kind of market you are in, creating more demand for your unit through marketing will shorten your vacancy times and increase your market rents. The last tip I will leave you with is to update your pictures, description, and market analysis every time a unit turns over. The more recent and accurate your advertising is, the better.