Anyone who owns rental property knows that vacancy kills cash flow. In the past, the narrative for the best strategy to get a house rented was simply putting a sign in the yard, price it right and the house will rent. If you are lucky, you can still rent your house with that strategy, but the reality is, that alone is being beat out by other homes on the market. Property Managers are getting better at marketing, Turnkey investors are putting premium properties with upgrades on the market that stand out and with virtually everyone having a smart phone, effective internet marketing is critical. In 2016, we conducted Move in Survey’s on all 110 tenant placements with various questions for us to better understand how tenants find us, why they choose the homes they do, market pricing, views on renting and other behaviors that we will discuss in future blogs. Pulling data from our survey’s, here are some tips in getting the properties rented faster.
1) Online Marketing: Obviously placing a sign in the yard is important, but what else is important? Our Move in Survey’s show that signage still generates a good portion of our leads, but it is not the # 1 driver for the way prospective tenants find us. The results for how our incoming tenants initially find us was online marketing through sites like Zillow, Craigslist, Trulia, Hot Pads, et came in # 1 at 52%. Sign in the yard was second at 23%. Surprisingly finding our site was 3rd at 17% and 4th & 5th were referral and other. We bought the domain www.MemphisRentalHomes.com, which is probably a good reason that finding our site came in 3rd (Which at the time of publishing this blog is being worked on and will be updated late next week). It is common for me to drive a neighborhood, see a vacant home with a sign in the yard, search for that home on the Property Manager’s website and to find the property is not listed on their site. That “Sign in the Yard” is the only marketing for this investor’s home by their Property Manager, which is putting them at a huge disadvantage for those Managers who are good online marketers. This is an lazy approach seeing that most Property Management software automatically syndicates the listing to all the relevant marketing websites.
2) Pictures & Marketing Copy: With online marketing coming in # 1 for us, having great online pictures and creative marketing copy to point out the features and benefits is critical in making your property stand out. Below is an example of a current ad copy we have running. We talk about the curb appeal, the features and upgrades, along with mentioning the new roof and HVAC system help in being more energy efficient thus reducing the utility bill. The ad is backed up by great high res pictures with an wide angle lense. We finish by talking about our A+ Rating with the BBB. Below are a few examples of the pictures we use to support the advertisement.
“Available NOW! This is home is the one you will be proud to drive up each day as it features a beautiful front lawn and an attractive a brick exterior, fireplace, mosaic tile floors and gorgeous hardwood floors. The bathrooms have been updated with ceramic tile and new vanities. The den and master bedroom each feature ceiling fans and the kitchen has been updated with designer faucets, ceramic tile and new counter tops. The new HVAC system and roof will help your home be more energy efficient, thus lower MLGW bills. We have an A+ Rating with the BBB that is earned from taking care of our tenants.”
3) Online Ratings: If you have an A rating or higher with the BBB, then advertise it. 26% of our tenants in 2016 chose the CB Properties A+ Rating with the BBB as one of the factors for choosing their home on their move in Survey’s. Zillow do a survey a few years back and tenants listed bad customer service from their landlord/property manager as a reason they vacated a home. Tenants do care who will be managing the home they occupy.
4) Prompt Lead Follow Up: 26% of the individuals indicated on their move in survey’s that they had been in the market 30 days or less looking for their home. Knowing that, timing is critical for following up on leads and phone calls. It is impossible at times to catch every single phone call that may come in as we may get 300 a day. With 26% prospective tenants looking less than a month for their next home, having a good phone system and internal processes to make sure each lead is followed up with ASAP is critical. Waiting 24 hours may be to late as that prospect may have found their home the day before. Also, start your marketing efforts as soon as your tenant tells you they are moving out. We will immediately post on our company website with “Coming Soon.” Since we have great marketing pictures from the last time the house was on the market, we can utilize these same pictures. By advertising “Coming Soon,” you can capture the 75% of the individuals whose home search is greater than 30 days. The pictures will drive a phone call, which upon a pre-screen approval, an appointment can be made to view the home with the current tenant still in the house. I will admit, that is harder than it sounds, but most leases have language that allows for the Property Manager to show an occupied home.
5) Curb Appeal and Home Condition: This is also important in today’s market to stand out above your competition. There is an increase in competition of available homes, which if you market right and your home looks great, then you have nothing to worry about. First impressions are important and the exterior of your home is that first impression. A well-maintained yard with bushes cut, roof free of debris, gutters clean, simple landscaping, beds with mulch and having a yard manicured nicely will increase the chances your home gets called upon first. A mentor of mine in the business always said, “Your tenant will look like your home.” Simple advice and so true! The inside of the home should be clean, smell good and be ready for the market. A few investors we work with will ask if they can do the bare minimum to get the house ready and once the deposit is received, then finish the remaining items needed to be done; not a chance. We would rather release the home to another management company then implement that strategy as it is a waste of everyone’s time. You never get a second chance to make a first impression.
6) Accurately Pricing: Just because your home is within a certain rent range for the area does not necessarily mean you will obtain that rent. If your home is tired looking without updated light fixtures, ceiling fans, flooring upgrades, kitchen & bath updates; basically looking like something out of the 1990’s or before, likely your home may need to rent below the market rent range to obtain quick occupancy. Tired carpet is the worst first impression a tenant can see when they walk through a door. Most investor grade carpet features a thin pad and is all together a cheap carpet that deteriorates quickly, sometimes after the first tenant turn. If your property falls in this category, you should consider vinyl plank flooring in the high traffic areas. It may be 2 times more expensive, but it looks better and is more durable than carpet. I assure you, the ROI on vinyl plank flooring is far better than carpet. Maybe you get lucky if no other homes are available in the area in which your home is located, but likely, there are going to be homes provided by savvy investors and excellent Turnkey Providers that spent money on the front end with retail ready upgrades that tenants will go to first and pay the market or sometimes, above market rent. The 4 top choices our tenants chose as the reason they picked their house over others in the area were:
• Fenced in backyard at 53%: Overlooked by many investors because of the cost, but important to tenants that want privacy, have kids or pets.
• Flooring at 38%: Most of our homes we manage our homes sold through Memphis Turnkey, thus have vinyl plank flooring in high traffic areas that look great and open up the space!
• Curb Appeal at 31%: This includes what was discussed above, but also the exterior being painted, updated light fixtures and rotten wood addressed. Check out the front of house pictures featured in this blog as examples.
• Kitchen / Bath update at 28%: This includes updated countertops, possibly ceramic tile, updated faucets with finishes such as brush nickel, chrome or oil bronze, some appliances, new or refurbished cabinets and if necessary, updated cabinet hardware such as brush nickel.
Below are great examples of well-polished homes positioned to rent quick and at the top of market rent. These homes have the features and benefits that tenants want and upon walking through, give prospective tenants that “Wow” effect you are looking for. This is the standard these days for long term stable occupancy that provides consistent cash flow. Are you, your property manager or investor partners positioning your property for success?