In my 18 years of multifamily ownership and management, I have discovered this truth. “When an apartment is vacant, It’s one of these three things- condition, price or marketing”. Usually in that order.
When faced with vacancies start your analysis in this order.
1. Condition
1st is to make sure the unit is in rent ready condition. This seems obvious, but you might be surprised. If the unit is in not rent ready condition… fix it.
2. Price
Is the asking rent too high for the vacant unit (Gain to Lease)? You will need to look at comparable properties/units in the area to decide. This is what is called a Market Survey in the property management industry. It’s just a fancy way of saying… “call the other properties in the area and ask them what they are asking/getting for their rents”. Secret shop them if you want a real feel for your competition.
3. Marketing
At this point you have looked at other properties in the area and you have a feel for what things are ACTUALLY renting for (not just asking). Is your unit overpriced? Are you asking too much in rent? Before you decide on that answer, factor in the marketing aspect. With great marketing it is possible to get rents that are above market. With bad marketing it is possible to offer rents below market and still have vacancies.
I mention marketing last because it is arguably the most important. A great unit at a great price will sit empty if no one knows it is there. Pricing your rent right is important but marketing is key. People say “Create a solution to a problem and the world will beat a path to your door!”.
BS!
No one is beating a path to anyone’s door unless they are following a great marketing campaign that led them there!
For more tips on how to market and manage a multifamily property, check out my Facebook group Real Estate Raw.
