Vacant rental properties can be hard to find tenants when, instead of looking for a rental property to live in they are away on vacation. In the summer months, they maybe at the beach. Holiday season tenants are away with family.
Here's what a Philadelphia property manager does during these slow rental times.
Read transcript here:
At Grow Property management we see an interesting phenomenon that happens in the summer in Philadelphia. Today as we were filling a unit, nearing the end of July, the temperature was about 100 degrees. This time of year, the city is just empty. It’s kind of pleasant, actually—you can actually find parking, you can go to a store and have space to breathe, and the roads aren't crowded. This is because in Philadelphia, everyone goes to the shore in the summer!
With so many people out of the city, it is normal for us to have some rental vacancies this time of year. Ideally, we try to have vacancies only in the spring because that's when properties are much more rentable, when our rent can skyrocket, and when we have a better selection of tenants. Because of this, when we get a new property to manage, we aggressively work to ensure it will be vacant around April or May since we can really leverage a lot of additional benefits for the owners.
Yesterday, an owner reached out to me because she was feeling anxious to get her property rented. We just took on her property about three weeks ago—during this incredibly hot season when everyone is at the shore—but she was already urging me to lower the price. As a property management company owner, I try to respect what rent an owner wants us to ask for, but at the same time I have to represent my clients’ best interests. So, I was doing my best to ease her worries and explain that no matter how low the rent goes, we would likely still not be able to place a tenant in the near future.
In the case of vacancies, we have metrics that we can look at. When we have an extended vacancy, we start analyzing the property. If we can't find anything wrong with it and can't figure out what's going on or why it’s not getting the interest that we're used to getting for our vacancies, then we start looking at all our other rentals. If all of our rentals are slow and none of them are really getting traffic, then we know it has nothing to do with the individual properties; it just correlates with the market at this moment.
Since everybody is at the Jersey Shore this week, there just aren’t potential tenants around right now! What was interesting about this property is that yesterday the owner, while she was willing to follow my advice, seemed skeptical. I told her, “Look, you are getting nice traffic. We’ve only had it up for three weeks, so I don't think it makes sense for us the lower the price yet.” Lo and behold, today we got her a signed lease and a deposit paid in full! The circumstances proved my point. The only reason why we weren’t getting the tenants before is because they weren't here to look at her property; they were at the shore.
Before you go making a drastic change like lowering the rent on a property, always look at your numbers. Make sure you reference the relevant data that can help you make that decision. If you have more than one rental, this is even more important. A property management company has a significant advantage here over a single landlord because we have more indicators and information at our disposal. Right now, for example, we've got about sixteen vacancies that we can compare to each other to help us find out what is or isn’t working.
We’ve rented quite a few properties this month despite it being slow, so we have the numbers in front of us that allow us to see what's going on: our renters just don't happen to be in Philadelphia right now! They’re not out looking for rentals at this moment, but they will be next week.
In the opposite case, if all of our rentals are doing super well except for one, at that point we would need to create an advertising strategy. We would first audit ourselves and say, “Okay, what's going on? Are we not operating optimally?” It can sometimes come down to price, but it’s important to consider the multitude of other factors that can affect our business seasonally as well.
