Investing in multi-family properties can be very lucrative, when done correctly. In fact, according to the CBRE, the average yield from multi-family property ownership was 9.75 percent between 1992 and 2017. During this twenty-five-year period, multi-family property ownership outperformed the stock market (as measured by the S&P 500) and attracted a host of new investors.
However, though it is clear that multi-family property ownership can help you earn a significant income, your future income is by no means guaranteed. In order to maximize the earnings potential of your property, you will need to overcome a variety of property-specific challenges.
One of the most common challenges faced within this industry is finding renters to fill your property. This particular challenge has become greater over the past few years, with the COVID-19 pandemic causing many people to change where they live. If you want people to rent in your specific property—rather than one of the many alternatives available—you will need to be proactive.
Below, we will discuss some of the most effective strategies you can use to find more renters. By increasing your occupancy rate and decreasing the amount of time that lapses between tenants, you can improve your outcomes as a property owner.
Use Multiple Listing Sites
When people need to find a new place to live, the first place they turn is usually the internet. The internet is what enables them to compare many different properties, quickly gather facts, and begin creating a shortlist of places they would possibly consider living.
Utilizing an apartment listing platform, like RentHop, can help you increase your digital exposure and find new renters. These platforms make it easy for prospective renters to find available properties and learn about their basics (square footage, features, location, etc.). By listing across multiple different platforms, you can significantly increase the chance that someone who is ready to rent will stumble across your property.
Establish a Social Media Presence
Within the broad realm of “The Internet”, social media, undoubtedly, plays a very significant role. Property owners that want to reach a wider audience can now use social media—both paid and unpaid—and increase their digital footprint.
Instagram is a great place to begin your social media campaign due to the fact that the app itself is so image centric. But other places you might want to consider building out your web presence include Facebook, as well as less “conventional” social media platforms like Twitter, LinkedIn, and SnapChat. Creating a broad, diversified social media presence will increase the visibility of your property and give you myriad opportunities to showcase your best features.
Invest in Additional Amenities
If you’re not in a position where you can feasibly lower rent, what you might want to consider doing is enhancing the total “rental package”. For most property owners and property managers, this is usually means investing in additional amenities and increasing the value of the property as a whole.
There are many amenities you might want to consider adding—and if your property has many different units, you can usually get a better return on your investment. A pool, a gym, an outdoor recreation area, parking, basic services, and other in-demand features can help attract possible renters that might have otherwise overlooked your property.
Research Your Competitors
If you own a rental property, it is a good idea to familiarize yourself with your “competitors” or, at the very least, with the properties that are relatively similar to your own. Conducting thorough competitor research will be especially helpful when it comes time to create a pricing model for your renters.
If your property’s proposed rents vary by more than ten percent from your competitors (in either direction), consider asking yourself why. You should also take a look at the sorts of amenities these competitors offer, where their properties are located and, if possible, try to determine the properties’ occupancy rates.
Offer More Flexible Terms
When renters have many different properties available to choose from, they are more likely to be deterred by relatively small issues. By increasing your flexibility, you can establish a more mutually beneficial relationship with these returns and will be less likely to turn them away.
There are quite a few ways you can make the rental terms more agreeable. Being flexible with the move-in date, decreasing the security deposit, allowing a month of rent to be deferred, and other options will make people much more likely to want to rent from you.
Create Special Promotions
The rental cycle is usually very cyclical, with summer typically considered the busy season and winter considered the slow season. To help smooth cash flows and make the flow of new renters less volatile, many property owners will create special promotions throughout the year.
Offering discounted rent for the six months is a great promotion that will inspire many renters to sign their lease today. Other possible promotions include an off-season promotion, a part-year leasing special, refer a friend specials, and many more. Having a limited window for these specials will also help create a sense of urgency.
Hire a Property Management Team
As an investor, you may have hoped that property ownership would be a simple “money in, money out” operation. Unfortunately, this is not always a case. For a property to be profitable, it needs to be effectively managed. The question that remains is who, exactly, will be the one that’s left in charge of the management.
Hiring a property management team can help you avoid some of the tedious tasks involved with property ownership, such as the constant need to be finding new renters. They’ll also help manage the communications with these renters, along with most other elements of owning the property. Though the team will need to be paid (and thus, decrease your short-term bottom line), many property investors find these teams to be worth the investment.
