The American market is flooded with people searching for affordable places to rent. Dionne Searcey at The New York Times wrote a compelling piece about how more people are renting as homeownership steadily declines. That was more than two years ago. Even more recently, researchers at Pew Research Center published data revealing that more US households are renting than at any point in a half-century.
The trend isn’t likely to slow down. In fact, it’s much more probable that trend will gain momentum. That’s the impression held by Forbes writer Samantha Sharf, who made six predictions about the housing market for 2018. According to her, low inventory coupled with skyrocketing prices will continue adding more pressure to buying and renting decisions. Those are ripe conditions for visionary businesses and entrepreneurs, especially those willing to dabble in real estate investment and development.
Outsiders often mistakenly assume that a surplus of business opportunities will automatically translate into lucrative profits. That isn’t the case. As a result, freshly minted landlords and property managers too easily fall prey to otherwise avoidable pitfalls. Fortunately, there’s no shortage of informative literature to guide those without much experience of their own. Forbes contributor Sarnen Steinbarth shared practical tips for first-time landlords, which contains five salient pointers for anyone getting started. He highlights everything from becoming efficient and proper documentation to understanding the fair housing laws and screening applicants appropriately.
Another helpful resource was put together by Lucas Hall at Landlordology, who explained the seven cardinal rules of property management. The first thing he introduces are adequate screening practices and eschewing any kind of discrimination. Another important takeaway is the value of making rent payments easy and automatic. That means using an online platform that shouldn’t stop at rent payments alone. Maintenance requests can be processed and announcements can be made using industry standard software. Even something like a free rental application process can be enabled online, and the list goes on and on. Of course, more features might mean higher premiums.
Tenant turnover is one issue that all landlords and property managers have to address regularly. Most professionals in real estate place the blame squarely on the tenants themselves, but there’s usually more to the story. Paula Plant at BiggerPockets shared a seemingly controversial perspective while describing the truth behind tenant turnover. She opens by recollecting a scenario in which her friend had decided not to renew a lease based on some rather trivial maintenance issues. The landlord and/or property manager could have easily prevented her friend from moving elsewhere. Looking at reviews and hiring a well regarded company may be well worth the premium if you’re avoiding having gap months without tenants, explains Choose Gulf Coast who offer property management in Sarasota.
Unfortunately, tenant turnover cannot be entirely mitigated with proactive property maintenance and convenient online features. The most successful landlords and property managers go a step beyond what’s expected of them. Another BiggerPockets writer, Jered Sturm, proposes some unconventional yet highly pragmatic advice to those willing to do the same. Welcome gifts, quarterly checks, and anniversary presents are his claim to fame. He explains that the goal should be to add a degree of humanity to the otherwise cold business relationship. Offering overspray removal to tenants with automobiles right after the winter months could be one idea. Another idea might be hosting an all-inclusive summer barbeque for tenants and/or prospective tenants.
Again, the objective is to humanize the experience and forge a more meaningful bond with people who are, ultimately, customers. Skeptics remain dubious about such tips, but they should explore the data promoted by Taylor Short at Software Advice. In his report, he lists four incentives proven to work when it comes to tenant retention. It’s difficult to argue with the facts. Real estate holds tremendous promise as long as landlords and property managers exercise sound judgment.