Making Your Unit the Winning Choice Among the Best Renters
Recessions challenge the best quality tenants
In ordinary times, going through the proper marketing and screening of potential tenants is relatively straightforward. However, in a pending recession on the heels of nearly a year of high inflation and tough economic conditions, you need to be extra careful when marketing your units.
In this article, we’ll walk through unit marketing during a recession so you can attract tenants that have a higher likelihood of weathering the tough times.
We encourage you to review your lease and practices with your real estate attorney so you are in compliance with local and state regulations.
How to market your unit in a recession
Making your property as appealing as possible is more important than ever during stressed economic times. Prospective tenants will be more careful and spend more time researching and touring potential rentals as they likely will be looking at longer-term rental situations. Tough economic times tend to make people revisit their priorities and life situation so they’re not faced with tough decisions if their income suddenly changes.
Before rushing to market your property, take time to assess your lease. There are a number of leasing best practices, but none is more important for marketing than the notice date you build into your lease. A notice date is the last day your tenant can let you know if they are choosing to not renew their lease. Here is an example of a notice date:
(A) This Lease will AUTOMATICALLY RENEW for a renewal term of (1 year with a minimum increase of 5%) at the Ending Date of this Lease or at the end of any Renewal Term unless proper notice is given. Proper notice requires the Tenant or the Landlord to give at least (60) days written notice before Ending Date or before the end of any renewal term.
(B) If notice is given later than required, rent is due for the entirety of the Renewal Term.
(C) Any renewal will be according to the terms of this Lease or any written changes to it.
When marketing your unit, if your current tenant is required to give you at least 60 days, you have ample time to start assessing the unit, marketing the property and conducting in-person or virtual showings. Being proactive about marketing can lead to your unit being leased before your current tenant has even moved out.
Once your tenant gives you notice they will not be renewing their lease, your first step should be to contact the tenant and get into the property. Reach out and explain that because they are leaving, you will need to access the property for marketing photos and eventually, showings. Give them a number of days to clean the unit and then schedule a time to come take photos. If you have a property management company, they will do this for you.
Getting great marketing photos can be a little difficult, but there are a few tricks that can help:
Best light of the day—Shoot in the early morning or the early evening to capture the best light, depending on the orientation of your property.
Quality camera—You can capture attractive images using a higher quality camera, many can be found on newer cell phones.
Patience and variety—It’s better to take your time and take multiple images at different angles so after your shoot, you can select the best ones to post.
Avoid unsightly areas—Avoid problem spots that are temporarily unsightly due to your tenant’s belongings. These can be removed and cleaned after the current tenant has vacated.
Avoid personal or expensive items—Be as generic in your shoot as possible. You want your prospective tenant to envision living in the space.
Polish your images—Crop, edit and brighten your images before posting to maximize their appeal.
Showing the property
Have a conversation with the current tenant on how to conduct showings of the unit. Depending on whether you are self-managing or using a property management company, showings are going to operate in a number of ways:
Arrange showings based on your tenant’s schedule, so they can let in prospective tenants
Conduct all showings yourself and use a spare key to access the unit
Have your property management team schedule and conduct all showings, as well as coordinate with the current tenant on your behalf
Work with your current tenant to ensure that showings go smoothly.
Publicizing your property
Now that you have your photos and you have established a showing schedule with your current tenant, it’s time to start marketing the property online. There are a number of online sites to market your property:
Listing sites—You can pay to list your property on listing sites; shop around for prices and look into which sites are most visited by renters. Depending on what kind of property you have, various sites have specific purposes and viewers. There are sites specifically for affordable housing, student housing, and luxury-style apartments.
Facebook Marketplace—This is a great source because it’s free and widely used! Your property will generate a lot of views and you can cross-post to Facebook Groups that are specific to users looking for rentals. One downside to this is you will have to most likely use your personal Facebook to post. If you have a property management company, they should be posting on their Facebook.
MLS—The Multiple Listing Sites (used by licensed realtors) is a great way to get your property marketed to realtors looking for rentals on their client’s behalf. In order to gain access to these sites, you will need to enroll the help of a property management company or real estate agent.
Property management company—If you are using a property management company currently, don’t worry, they would be taking care of all of this as well as paying the fees for the resources noted above.
When marketing your property, include the following information along with your photos:
Bedroom/bathroom count
Square footage
Price
Utilities/appliances included
Features and amenities
Parking
Pet policy
How to apply
Contact Information
Check out other listings to see what flows and reads the easiest. Prospective renters are viewing multiple sites and apartments as they browse. Here are a few important things that a high-quality tenant will be considering, especially during a recession:
Proximity to transportation, restaurants, medical centers, and retail
Safety of the community
Access to schools, universities and office parks
Responsive local government
Ratings of community/town
When a recession hits, people change their habits. They drive less, eat out less, reduce their overall spend to make rent and utilities, let alone the basic necessities such as food and clothing. Even a tenant with a stable employment history can be laid off when a relatively successful company begins cutbacks. People who are realistic, responsible and mature will be best prepared to weather the recession and be stable rent payers. Keep these things in mind as you are reviewing tenant applications and interviewing potential renters.
Qualifying prospective tenants
Once your property is posted, you will start getting leads of prospective tenants wanting to tour your property. Be prompt and informative when responding so the prospective tenant is met with professional communication and courtesy.
Depending on the arrangement you have with the current tenant or if the unit is vacant, you will need to arrange showings ahead of time. Include nights and weekends to increase the amount of showings. Make sure your current tenant understands and agrees to the showings as well.
When showing the property, listen carefully to the responses or questions the prospect has about the unit. If a pattern occurs, you may want to address those concerns to improve the attractiveness of your unit during showings.
By marketing 60 days before your current tenant leaves, you are maximizing the potential income your property can yield. In most cases, you should be able to secure a deposit and get a lease signed within the 60 days or very soon after. If not, you need to reassess the situation. Ask yourself the following questions to determine why your property is not yet leased:
Is this property showing well?
Are the tenants currently living there clean and polite or are they making the prospective tenants uncomfortable?
Are there glaring or suspect issues with the property that would turn a renter away?
Are there cost-conscious improvements I could make to help the property show better?
Would it be better to wait for the current tenants to move out, do a turnover and then re-market?
Is the property overpriced?
You will be able to answer these questions if you visit the property and listen to what prospective tenants are saying during showings. If you are not sure, reach out to the people you showed the unit to and ask them for feedback. It never hurts to have a better understanding of how your property is perceived.
Be ready for the “yes”
Have a lease drafted before showings and before applications start coming in. You will want to get the lease signed and the security deposit secured as soon as possible. Set the lease start date two weeks or more after the final tenant moves out. Give yourself enough time to do a move-out walkthrough to determine how much security to deduct from the departing tenant and to do the necessary turnover work. Assess your property during the showing/marketing phase so you can fix major issues before the incoming tenant’s move-in date.
The more you do to prepare your property to outperform other competitive rentals in your area the better the chances of attracting the highest quality tenant that will weather the recession and be a loyal, reliable tenant for years to come.