Low rents. The fact of the matter is, the lower your rent is, the more affordable it is to sub-par renters, or trash. You will attract them in droves at a low price. But the flip side to that is you also attract more good renters. Good renters are always looking for a bargain; good renters that know their financial limits, good renters do not want to live paycheck to paycheck just paying rent. Good renters know what they want, and will not pay a penny more. Good renters may even want to negotiate a bit, just to make sure they are getting the best price.
Economics 101 says, “Reducing price, increases demand.” This is true when you are selling widgets; it is also true when you are selling rental vacancies. Hotels, airlines, grocery stores, retailers always know reducing prices will move the goods. Moving goods today, is better than being stuck with a truck load of month-old bananas. When you think about it, an empty rental unit at month end, is no better than month-old bananas. The bananas are no good. You cannot rent last month to anyone, only next month.
When you attract more people, you need to have your written rental criteria in place. You will likely have to reject a few tenants, either verbally or in writing, because they are not the type of tenant you want. Telling a crying mother of five, who is living in a shelter due to numerous evictions, that she is not worthy of your place is not always easy. Telling a criminal those six months of being clean are not enough. But it is the right call. Even more important when they just got out of prison for murder. You need to make decisions based on profitability success formulas, not emotion. Making emotional decisions will lead to sub-par renters and possibly discrimination lawsuits.
Sooner or later, a solid tenant will view your unit and want to rent. When asking renters about their employment, rental history, criminal background and credit, you will get a feel if the showing is a quality tenant or not. When you get a solid renter, know how to ‘sell’ the unit’s features, yourself, the area and do what it takes to make sure you get the application in hand. Know how to lock them in with a Holding Fee Agreement. Knowing what concessions to make that a renter really wants, and costs you very little. You need to understand your target market, and focus on them.
Remember, you are in this business to make money, not lose money. You cannot make money with sub-par renters.
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