Understand Vacancy Loss – treat your rental like a business!

Posted on | Education/Informing, Marketing, Opinion, Property Management Blog

Because you GOTTA rent your home

Many of our client homeowners are in the landlording business because they have to be, not because they desire to be.  They are not typically like my investors-types who plan and save for out-of-pocket costs that result from marketing the home, repairs, preventative maintenance and of course regular updating to be competitive when marketed.  

Owners don’t always consider the long-term investment opportunities that may result from a rental property.  Getting those owners to make regular changes to their asking price can be harder than dieting over the holidays! 

Price reductions are key to getting rented – even small ones

Many owners struggle with reducing their rental asking price, even when faced with dismal interest.  Every week, we report to our owners how their marketing plan is going both digitally and the feedback from any showings. 

Owners can be stubborn when their home fails to attract interest at the advertised rate – AKA their “desired” price.   We market homes prior to vacancy, but once a home is vacant, owners holding out for a specific price results in a daily loss that adds up very quickly.   Experiencing vacancy loss can be a daunting prospect, but it’s even more frightening when you calculate it by the day!!  Keep reading!  

What if the rent doesn’t cover your monthly expenses?

Some owners can’t fathom accepting a rental price that doesn’t meet their mortgage payment needs and other monthly costs like insurance, HOA/COA dues, repair costs and of course, the services of a property manager – EVEN an awesome one.  All owners want their rent price to cover all of their expenses which doesn’t always equal what the housing market will allow on any given year.     

Vacancy loss occurs when your home sits vacant

Failing to reduce your monthly asking price to procure a tenant more quickly can add up to a much greater YEARLY loss for owners.  A home priced at $2,000 a month loses approximately $66 a day.  This does not include advertising costs, lawn maintenance and utilities.  That brings your loss up to about $76 per day.  WOWZERS!  Check this chart out:   Vacancy Loss Charted

Price changes increase interest and freshen up search engines

We encourage our owners to lower pricing at least $25 a week to increase interest, refresh listings and hopefully procure more interested parties to go visit the home and hopefully fall in love with it. 

There is no guarantee, but by lowering the price, you will usually see that interest increases significantly!  Ideally you want to see several showings a week.  Remember your home is only worth what prospective tenants shopping at that moment are willing to pay for it, not what you “need” it to be.  This is why markets fluctuate from year to year.     

Do the math on vacancy loss

When owners are unable to decide how to move forward with a new marketing plan (AKA rent reductions) I find it helps to bring the DAILY loss to their attention.  Many people don’t realize how quickly it adds up until they see it in black and white.  In addition to losing money by not having a renter, homes that sit vacant can develop maintenance issues which also cost $$$.  It’s better to have a well-qualified tenant that pays slightly less rent than you were hoping for than to have a vacant home. 

Even though your loss may be tax deductible, savvy owners lower price regularly to snag a good tenant and prevent it.  Invest your tax deductions elsewhere, like on preventative maintenance or updating your home.  Those things ADD value. 

That’s all I have today, now think it over and drop that price a bit so we can get a qualified tenant in your home!   

Mary – PROperty Manager for Stephanie Clark Property Management 

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What are our customers saying?

  • “I want to thank you for all of your help in getting this over the finish line. Yours is a refreshingly professional operation, and the property is emblematic of your systems-clean, tight, and well executed.”

    ~ Barry F.  (Tenant)

  • “Mary, I am so excited; thank you for all your hard work (and to the rest of the team), you ALL rock! I appreciate everything you have done making this so less stressful then I was expecting!”

    ~ Stacey S. (Owner)

  • “Thank you for your prompt, professional, and caring approach to all of my needs. :)”

    ~ Andrea E. (Tenant)

  • “Stephanie, You and your team are simply THE BEST!!”

    ~ D. Brown. (Owner)

  • “It has been a pleasure working with your team and of course the homeowners couldn’t be more wonderful!”

    ~ Dave A.   (Tenant)

  • “Stephanie, thanks for your great service. I could not be happier or more satisfied with you and your office and the partnership we have.”

    ~ Eddi V. (Owner)

  • “Thanks for keeping up on our house on Brahms. We stay worry free thanks to Stephanie Clark and Team. Of course we will refer you to anyone we know looking to buy/sell real estate in vb!” ~ 

    ~ Blake E. (Owner)

  • “I have to tell you that the gentleman that came out yesterday to do the smoke alarms was super nice.  He explained everything to me and was very pleasant. Thank you for sending out such lovely people, we appreciate it.”

    ~ Jessica W. (Tenant)

  • “We would like note that Mary has been nothing short of fantastic during this ordeal. She has been fully available and knowledgeable, whether we had questions or were seeking advice. We look forward to continuing our business relationship, finding good tenants”

    ~ Amber & Scott (Owners)

  • “Outstanding real estate team. They’ve managed my property for more than a decade now and the service has always been prompt, attentive and thorough. They also handled a sale of a different property and, again, the service was excellent. I can’t recommend them highly enough”

    ~ Lee Smallwood (Owner)

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