How to Find Tenants and How to Keep Your Rental Property Occupied

The most frequent question that I am asked is “How do you keep your properties rented”. Since I am an active landlord with many rental properties I decided to put my “system” down on paper so that other potential landlords might benefit. The following logical steps might seem obvious but you may be surprised to find out that you are missing a few key points that can make a huge difference.

Advertise

In order to find tenants, they will need to know about your property. The only way that they will know is if you advertise. Putting a sign in the yard is not advertising. The only people that will see a for rent sign in the yard are people that live on that street. Advertising should be both offline and online. Traditional classified ads are still a great place to look for a rental (especially on Sundays). However newer online venues are also a fantastic way to find new tenants. Since approximately half of your potential tenant base might not have access to a computer you are going to need to advertise utilizing both mediums.

Classifieds

You should advertise your property in the regional newspaper, the Penny Saver, and the local newspaper. You should also be aware of any other free publications and magazines where you can place an ad for free. The more ads you place, the more people will see your property for rent

Online Advertising

There are free sources and paid sources for online advertising. I use both. For example the most effective online source is Craigslist. Since Advertising is free you should post an ad on craigslist as soon as you have a rental property available. There are many other online web sites related to rental properties. If you look enough you will soon find many sites where you can place a for rent ad for free.

Website

You have to have your property online on a website. You can create your own website or you can use companies that allow you to advertise properties or create a simple webpage. The most important thing is that you have to have a website. Having a website with pictures gives so much more information about a property than a small classified ad. Having a website with pictures will also save you time because your potential tenants will be able to preview the property before deciding if they want to proceed with meeting you at the property. All of your offline ads including classified, display, and flyers will mention your website where additional pictures can be found. You should always put view pictures at (your website address) so potential renters will be able to see pictures of your house online.

Digital Pictures

In order to have pictures online you are going to need to have a digital camera. You can use the least expensive camera that you can find since the newer 5 megapixel cameras produce pictures that are far too large for online websites. Your pictures should be uploaded to your website and you should have as many pictures as possible. You should have a picture of each room in the house including the kitchen, bathrooms, living room, dining room, bedrooms, garage and utility room. You should also have an exterior photo of the front of the house, back of the house and the yard.

How To Write Your Ad

Be brief, factual and concise but make sure that you have all of the relevant information. You should also try and highlight the positives. If your property has a large yard, nice kitchen or anything that stands out as a positive feature you should mention it. For example remodeled bathroom, new kitchen, new appliances, new tile, swimming pool, central air, are all positives which make your property stand out. Here is an example:

Port St Lucie House for Rent

3 Bedroom 2 Bathroom House
Central Air, Huge Fenced Yard
Good, Quite Neighborhood
2249 SE Main St
Port St Lucie Fl, 34952
Pets Okay

$795 Per Month + $795 Security Deposit
$1,590 total to move in

Available Immediately
Call 561-123-1234
View more pics and other rental properties at
(your website address)

You should have a full color flyer with color pictures. Your Flyer should mention the same information about your ad but you should include at least 4 color photos. This flyer should be taped on the inside front window of your rental property and should be visible to anyone that walks up to your property to take a closer look. Since you are not at the property you want to make sure that they have an idea of what the inside looks like. This flyer can also be pasted in prominent public places like supermarket windows, coin operated laundries, and any other public place that will let you put up a flyer. This flyer should also be inside an info tube which should be attached to your for rent sign. Make sure you have at least 50 copies since you don’t want your flyer to run out.

For Rent Sign

Try and put as much information on your sign as you can but the most important items are number of bedrooms and bathrooms, monthly rent, security deposit, and move in. If you don’t include this information you will get many phone calls asking you how much the rent is and how much to move in. You want to avoid this so make sure you have the price on your sign. Many landlords do not do this which is a big mistake. Don’t forget your phone number which needs to be big enough to see from the street. Make the phone number big and all the other details can be smaller. Do not reuse old signs with writing on the back or any information that might confuse a tenant. You should also have another For Rent Sign on the inside window next to the flyer. The reason is because if someone steals your yard sign people will still know that your property is for rent. People steal yard signs all the time. Sometimes kids pull the signs to be mischievous.

Phone Number

This is without a doubt the second worst mistake that landlords make. If you spend money advertising a property and creating flyers then you need to have a system to make sure that your phone is answered when potential tenants call. You can do this by using a cell phone and answering all incoming calls. If you are on the other line, let the potential tenant know that you are on the other line and will call them right back. Do not delay calling tenants back. The tenant is looking at the Sunday classified ads and he is calling every house that is for rent within his or her price range. If you don’t answer the phone then the next landlord will. Don’t complain that you can’t rent out your property if you are not answering the phone. Potential tenants will usually not leave voicemails. They have one day off from work to try and find a place to rent and you want to make sure that you answer their call. Unless you have a really tight rental market in your neighborhood another landlord will negotiate a lease with them before you even get back to them. This is the second most important point to remember. If you cannot answer the phone then you can use a service like ring central which will set up a system for you to capture all the phone numbers that call and give them detailed information about the rental, the price and other relevant information.

Pricing Your Rental

I have saved the best for last. This is without a doubt the biggest mistake that landlords make. You need to look at the local paper, and the regional paper in order to see what prices other houses are renting for. Try and find the most comparable house that has the same number of bedrooms and bathrooms as your house. Then write down how many rental houses there are that are the same size and write down the prices. If your rental is not the cheapest then it will not be the ad that is called the most. Consider this information. If other landlords are trying to rent out their 3 bedroom 2 bathroom houses for $875 per month then that would be considered the going rate. If you lowered your rental house to $825 then your ad would be called much more than the other ads since your house would appear to be a deal.If you found a tenant immediately because your house was so cheap then you would be better off than waiting a month to get a tenant for $875. You would actually make more money.

Here is the math:

$825 x 12 = $9,900

Compared to: $875 x 11 = $9,625

In addition to saving money you would also have someone taking over the utility bill one month sooner which would mean a lower utility bill. You would also not be responsible for maintenance such as mowing the lawn on a vacant property. Finally you won’t have to worry about vandalism. Vacant houses do get vandalized. Some teenagers walking past vacant houses get kicks out of throwing stones at windows. If your house is vacant long enough people will try and break into it. You need to get your property rented as soon as possible. Having friendly neighbors helps since they can keep an eye out on your property. Make sure that you say hi to the neighbors and be friendly. Give them your card and let them know that you are renting out the house and looking for a tenant.

Remember that every day that goes by you are losing money if your property is vacant. A property that rents for $875 per month is costing you over $29 per day. Advertise effectively, lower the rent and get your vacancy filled as soon as possible. If you cannot afford to lower the rent because your mortgage payment is too high then you have overpaid for the property. There is not much you can do about that now. The old 1% rule of thumb works well in most areas. Don’t pay more than 100 times the monthly rent for a rental property.

If you cannot afford to rent the property for less than your mortgage then sell it. If you want to hold on to the property for the long term then rent the property. But be realistic about what market rents are and make sure that your house that is for rent is priced accordingly compared to similar houses for rent. It doesn’t matter what your house used to rent for. The only thing that matters is what the current rental market rates are. If you used to rent your house for $1,000 and now you can only rent it for $800 then that is the current market rate. Rents have declined in many markets over the past two years. However, rents will probably recover substantially as more homeowners lose their homes and begin looking for affordable rentals. The best way to find a tenant is to lower the rent until the telephone starts ringing. Just make sure that you are there to answer the phone.

By Lex Levinrad Copyright © 2008