Updated: October 22, 2022
Congratulations on purchasing a new property. I’m sure you’re excited to earn rental income from it. But before that happens, you need to find a tenant first, which can be a challenge given that it’s not only you who’s trying to get their place rented out.
So, how do you rise above the rest of the market and make it to the top of the priority list of people looking for a place to stay? Here are some tips.
Define your target market.
Every product has a target market and that includes your property. Who or what type of people would find your unit ideal?
For instance, a 2-bedroom apartment would be ideal for a starter family. While a bachelor’s pad is what a single, young professional would be looking for.
Consider their lifestyle as well. What type of work do they have? How do they spend their weekends? What are their struggles, fears, hopes, and dreams?
Having a clear definition of your tenant demographic will help you decide on the extent of furnishing you need for the unit, as well as its look and style. Certainly, young professionals would prefer a comfortable sofa bed to a chunky leather couch in their bachelor’s pad.
Moreover, knowing your target market will help with where you’ll list it and how you’ll present your property to potential tenants, as well as determine the range of its rental price.
Price it right.
Check out your area and find similar properties to find out their rental rates. Go through online and newspaper listings, but also go around the neighborhood and check bulletin boards nearby.
If you’re feeling investigative, go and see the units yourself. Inquire and pretend you’re an interested tenant. Sometimes, an agent will be the one who’ll show you the unit, which can be an opportunity to come clean and perhaps ask the agent to help you show and find tenants for your property too.
Ideally, compare your unit with those that have the same target market as yours. If your rental price is higher than the prevailing rate, then consider reducing it. Even better, think of how you can add more value to your property to justify the higher rate.
For instance, your rent might be a little higher but unlike other units in the area, yours come furnished with a 55-inch Smart TV and a brand new inverter aircon, which would appeal to young professionals.
Lastly, it’s recommended to do a costs and benefits analysis of living in your space to check if it will be affordable and attractive to your target market.
Make it look good.
Once you’ve established your rental price, then it’s time to prepare the unit for visitors. This doesn’t only mean doing a thorough cleaning of the property, but really giving it a brand new look, especially if there was a previous tenant.
Reset the unit with a fresh coat of paint if necessary, remove kitchen and bathroom wall stains, dust off the ceiling and room corners, replace old and broken furniture, and fix problems that could deter people from signing the rental agreement. Make sure that the unit smells fresh and clean as well.
I was once shown an apartment that had a leaky kitchen faucet which immediately turned me off because it made me think the plumbing of the property might already be old and would hassle me later. And it didn’t help that the unit also had dim overhead lightbulbs, which gave it a gloomy look.
Honestly, it wouldn’t have taken the landlord more than a day to have the faucet fixed and replace the dim bulbs with brighter lights before showing the unit to other potential tenants and me.
Lastly, many Filipinos believe in Feng Shui, so applying some of its basic design principles could help give your property a boost of good energy for those who believe in it.
Post an irresistible listing.
Take quality photos of the property. You don’t need a high-end camera for this. A lot of smartphones today are powerful enough to take clear and sharp photos. The key is to take pictures at proper angles and have adequate lighting.
Moreover, your pictures should be honest and help people visualize what the whole unit looks like. Also, include exterior photos of the unit, as well as the surrounding neighborhood. This will be highly appreciated by those looking at your listing.
If you’re feeling extra, do a video tour of your property, upload it to YouTube, and provide the link on your listing description. There are a lot of professional real estate tour videos you can watch online for inspiration.
Your listing should also include important details of the property such as floor size, pet restrictions (if any), amenities, neighborhood vibe, nearby public transportation, and other information that people might want to know immediately. This is another reason why knowing your target market is essential.
Lastly, remember that your listing is often not enough to close the deal. However, it should be good enough to entice people to contact you. Thus, it will help to give people something to look forward to if they schedule a visit. For example, put in your listing that there will be drinks and snacks, or say that your rate is negotiable if they go and see the unit.
Have an efficient system.
After listing, there will be inquiries and requests to visit your property. Once you have an interested tenant, the lease agreement needs to be signed and notarized, then advance payments and deposits are settled.
How you handle the whole process needs to be seamless and efficient.
Respond immediately to inquiries and prepare a template of answers to frequently asked questions so you can just “copy and paste” them. Moreover, set up an inquiry monitoring spreadsheet so you can easily send follow-up messages.
Ideally, people should be able to come and see the unit anytime. This is possible if you are willing to work with or have a property manager, real estate agent, or even just a caretaker. Otherwise, free up as much time as you can from your schedule so you can accommodate immediate requests, especially on weekends when most people scout for properties.
During ocular visits, whoever is showing the unit should be warm and hospitable. It’s better if they have a ready script that can make the guests feel comfortable. During the tour, they should be able to highlight the strengths of the property and be ready to answer both frequently asked and odd questions.
Once, I accompanied a friend in looking for an apartment. She’s quite superstitious, so in every place we saw, she’d ask the landlord how many black cats there are in the neighborhood. The responses to the unexpected question were amusing.
One of them, who immediately understood the reason for the question, told us about the strict barangay policy on stray animals and then proceeded to say that the apartment door faces the East, which is considered lucky.
However, what sealed the deal for my friend was when the landlord mentioned that two of the most recent tenants moved out because they both got promoted at work and decided to move to a bigger and better place. He says that he believes his unit can bring good luck to one’s career.
On the other hand, you should also be ready with your questions. Ask about their work, why they’re looking for a place, where they are currently staying, who will they be moving in with, and other appropriate questions. Carefully screen applicants and use your instincts to avoid bad or problematic tenants.
Lastly, have an available copy of the lease agreement and other relevant documents during unit visits to save time on the back and forth once there is an interested tenant. If they don’t want to sign right away, then politely ask when you can follow up on their decision.
Rental properties are relatively easier to manage than a business. And with these tips and strategies, you can hopefully minimize your vacancy rates and earn consistent and long-term passive income.
This article also appeared in MoneySense Magazine.
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