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High revenues and low operating costs result in a maximized return on investment. Proper maintenance practices result in lower operating costs. Understanding and caring about tenants results in higher rental revenues. The following Tenant Selection and Apartment Presentation Tips are provided to outline some of the management techniques property managers use to keep rental properties fully occupied. These Tips include:
Tenant Selection TipsThere are many types of tenants and many types of buildings. Different types of buildings are often suited to particular types of tenants. Failing to understand different tenant type characteristics can lead to problems and being too restrictive in selecting tenants can result in higher vacancy rates. Types of potential tenants can be categorized in various ways. They can be singles, families, empty nesters, the elderly or any other category that highlights common characteristics of tenants in a particular group. Different types of rental accommodation are often suited to tenants sharing certain common characteristics. It would, for instance, be very unlikely that a building with bachelor and one bedroom apartments would be suited to families. It is important for a property manager to recognize various tenant types and know which ones are preferred occupants for a particular property. The type of tenant most suitable for a particular building will affect the marketing, maintenance and tenant relations required for the building to achieve its maximum potential. Another useful breakdown of tenant type is to split them into two broad categories: renters by choice and renters by circumstance. Renters by choice will often stay longer and require a higher level of amenities since they choose their rental accommodation as their permanent home. Renters by circumstance may view their rental accommodation as temporary until they can save enough for a down payment on a home. Higher turnover impacts both maintenance costs and vacancy rates. Lifestyle restrictions on the type of tenant permitted in a particular building can have a significant impact on vacancy rates and rent levels. To many restrictions can result in an extremely limited market for a particular building. If, for instance, a building has a no smoking and no pet policy, this can drastically reduce that number of potential renters. Some estimates are that over 50% of households have either a dog or a cat. If the only permitted tenants are non-smokers that have no dogs or cats, an owner should understand that this policy could result in higher vacancy rates. These are only a few of the factors that can impact tenant selection and availability. Once the tenant is selected, individual background checks should always be made to ensure credit worthiness, employment stability and satisfactory prior landlord/tenant relationships.
Apartment Presentation TipsWhile unrealistic rent levels or poor tenant selection policies can adversely affect the investment returns on a building, poor product preparation can often result in the difference between a good investment and a poor investment. People choose their rental accommodation based on location, curb appeal, apartment layout and features and rent level with the condition of the apartment being the most important factor contributing to losing prospective tenants. A checklist for the proper preparation of the exterior of the building should include attention to the following:
A checklist for the proper preparation of the interior common areas of the building should include attention to the following:
A checklist for the proper preparation of apartment interiors should include attention to the following:
Proper attention to these checklist items will prepare accommodation for presentation in its best possible light and lead to lower vacancy rates and higher rents.
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