The rental market is a hot topic right now. In the locations where vacancy rates are on the rise, tenants are finding themselves in a stronger bargaining position. But whether vacancies are up, down or holding steady in your market, there are still ways to get tenants into properties without slashing rents.
Basically there are four reasons why no one is signing on the dotted line for a property, and price is just one of them. Before you start talking discounts with the owner, here’s a checklist of the three things that could be stopping you from leasing the property. Don’t even think about reducing rent if you’re not covering all these first:
You can’t get tenants interested if they’re not coming through the property in the first place. And getting their attention is down to having a great ad that displays high in their search results. ‘You can’t sell a secret’ is one of the great clichés of property management. If people can’t find you and your ad doesn’t make them want to stop scrolling, it’s no wonder the phone isn’t ringing.
You don’t have to be an amazing wordsmith to make an ad stand out. The right images are important but success really comes down to putting yourself in the tenant’s shoes as you write the ad. Focus on talking up the benefits of the property as well as the features so they’ll know if it’s going to suit them. But be clear and accurate too. There’s nothing worse for a tenant than turning up to inspect a place that is far from what they were promised in writing.
Another saying in property management is that a rental gets the tenant it deserves. In other words, if you’re looking to attract fastidious tenants who’ll look after a property, then have everything clean and ship shape for a walk through. Trying to dismiss outstanding maintenance and cleaning issues as things to be sorted out ‘before they move in’ is another no-no. For anyone who’s had the experience of turning up on moving day only to find they need to clean the property themselves, a property that presents as scruffy and grubby is a real deal-breaker.
For much of the last decade, we’ve had the luxury of incredibly low vacancy rates in residential rentals, particularly in our capital cities. With 50+ people turning up at every open, skill doesn’t come into it when you need to seal the deal and get a tenant in. So a lot of businesses haven’t had to coach their property managers in what it takes to secure a tenant.
This really comes down to getting away from conversations that are purely transactional and focussing on building relationships. That might sound a bit corny, but choosing where to live is a very personal decision. Making a connection with people as they’re viewing makes it much easier to continue your conversation with them beyond their initial visit. And each conversation you get to have leaves the door open, so to speak, for that person choosing to move in.
And if you’re still not getting anywhere after multiple follow-ups, just have the courage to ask, “what would it take for you to live here?” The answer could well be something that’s entirely possible, like a new cooktop or throwing in garden maintenance to sweeten the deal.
If you’ve gone the extra mile in all these areas, you’ve earned the right to have that conversation with your property owner about the rent. You should already have a good idea of how similar properties in the area compare on price. This really is the main point you need to be making to a property owner as no tenant wants to pay more than they think a property is worth.
Start the ball rolling by showing your owner other similar properties and their asking price. Then you can give an update on numbers that have gone through the property and chosen to rent elsewhere, as well as any feedback they’ve given you on what they thought of the owner's property.
If a rent adjustment to meet the market isn’t going to work for them, see if you can come up with other financial incentives like an introductory discount. This can work well if they own a whole apartment complex and don’t want to set a precedent for existing tenants to pay less rent.
Getting the best outcome from this discussion is important. A vacant property is the one you’re most likely to lose from your rent roll. And it’s an outcome that doesn't work for anyone – the owner isn't receiving rental income and your agency isn’t getting paid either. So treat this as an opportunity to let your owner know that you’re putting in all the time, work and skill it takes to find them a tenant. Show them the ad so they know you’re presenting their property at it’s best. Seeing this real evidence of your commitment and effort tells owners that what they’re paying you is definitely worth it.