As the current or future owner of an investment property, a high vacancy rate is the stuff of nightmares. Vacancy not only minimizes an investor’s return but also decreases the profitability of an investment property over time. Though currently, demand has surpassed supply in most of the commercial real estate realms, that doesn’t mean every property is safe from vacancy.
So, if your property has remained vacant for some time, or you are anticipating future vacancies take a look at some reasons that could keep your property vacant.
- Unappealing Exterior
This may seem obvious, but if your property is unattractive people will likely be put-off from inquiring. You truly only get one first impression with possible tenants, so be certain it’s a good one. Be sure to manicure the property right up to the street and spruce up the outside of any buildings to create maximum curb appeal. If you take the extra time to make sure that every detail is looking its best,
- Lack of Proper Advertising
Potential tenants won’t be able to find and inquire about your property if they don’t know you have vacancies. Make sure your ads are going out to targeted demographics on various outlets. Well-displayed signage, online and print ads can all be combined for ultimate saturation. When it comes to your ad, remember to highlight all of your property’s attractive features and incentives. However, do not over exaggerate the key selling points. You do not want potential tenants to be disappointed if and when they come in to see the space.
- Astronomical Pricing
It is important to price your property realistically. You want the price to reflect the value. If you are pricing above market value, ask yourself why? Do the features of your property reflect the listing price? If not, you may want to check out comparable rates that similar properties are going for. Pricing yourself slightly lower than other similar properties may help fill vacancies quickly.
- Poor Conditions
If your property is known for poor conditions, new tenants will look elsewhere when relocating to a new space, apartment or office. If it is dirty, infested with pests, and known for tenant hardships your property will likely stay vacant. So, exercise care and make sure your property has good conditions for tenants. If the property is in really bad shape, it may be time to make an investment on improvements. Upgrades won’t just bring in potential tenants, but could also help the next occupant feel more comfortable signing a longer-term lease.
- Difficult/Nonexistent Property Manager
If your property manager is difficult, non-responsive, or slow to address tenants’ needs, tenants will not want to renew leases. If your property manager does not exist, that’s even worse! A good property manager will not only allow you to do less work, and keep property its best condition, but they will also help find tenants. If tenants are unhappy with the property manager, it can translate to poor conditions. Word of mouth travels, so make sure your property manager is one who is professional and proactive.
You know this, but, it is vitally important to take an active role as an investment property owner. If your property is sitting vacant, it can’t make you money! Remember to exercise the above steps to help your property reach its maximum potential, returns, and tenant occupancy. When you need expert advice on pricing or help finding your next tenant, Elifin is ready to help!