Have vacant multi-family rental properties in Edmonton? You’re not alone.
The current economic climate, combined with an oversupply of multi-family construction from starts in 2014/15 and new home construction has increased available supply and competition. It has also improved the quality of available rental stock in Edmonton’s rental housing market. CMHC forecasts an increase from 4.2% in 2015 to 7% at 2016 end and into 2017.
Or in other words… 93% of properties are rented! So how do you ensure you’re one of the successful 93%? Here are active strategies we have implemented in our own single family and multi-family rental portfolio in Edmonton during 2016 to keep our portfolio occupied with quality, happy, paying tenants.
Pass on these tips to your property managers, caretakers, resident managers, or implement yourself.
We all know location matters in real estate, so where is your property located? Is it an A, B or C quality area? What’s the walk score? What amenities are in the area that add value to a tenant, and help dictate your target market… is it better for families, singles, 20 something millennials or mature people? What about transit access and driving accessibility? Incorporate those elements into the write up for your ads.
There are many brand new built condos, and many ‘default landlords’ renting out their own homes they were stuck with after buying a new one or other similar situations. This combination has increased the quality of properties available on the rental market, and as such, landlords in Edmonton need to ensure they are offering renovated, like new quality properties if expecting rents over $1200-1500 per month.
You may have to invest $5,000 to $15,000 to upgrade your properties in this market to get a good quality tenant. But remember this helps attract a higher quality tenant, for higher rent, and also adds value to your property in the long run.
Don’t over renovate for the location, just be the “nicest rental home on the block” so you attract the best quality tenants looking in that area. For homes older than 10-15 years, best investments are with paint, flooring, lighting and door hardware. We’ve had good success with vinyl plank flooring and Berber carpet. Current design trends are towards light grey tones and clean whites. Here’s an example of one of our recent renovations in Edmonton.
Location, size, number of bedrooms and bathrooms, and parking/garage affect who is the best fit for your property. Write your ad description targeting this… “perfect for a family of four” or “ideal for couples” or “perfect for entertaining a large family” or “dream man cave/garage”. By speaking directly to who is the best fit for the property, you’ll get more responses from your ads, and attract a higher quality tenant who is more likely to stay long term. Don’t just accept anyone willing to pay rent, determine your target customer, like any business, and then speak directly to them, their needs, wants and personality. This also dictates where you’ll advertise as who they are dictates their behaviour when searching for a new home.
Ensuring your asking rental rate is in line with your competition to attract the best quality tenant is key. If you’ve had your property advertised and are getting a lot of views on your ad, but no inquiries, you’re rent is too high. There are various ways to view comparable rental listings, a few are:
This may seem overly obvious, but is often ignored in our digital world… write a ‘master ad’ that you save as a document on your computer. Save all the photos you intend to you there too, and then just copy/paste and post the ad to the various places now or the next time you have a tenant turnover. It’s also a good idea to send this draft to a few friends that might fit your target market and ask for their feedback. Adjust your ad before posting live!
Take good quality photos! Example photo from AirBnB
This shouldn’t even need to be said, but is also too often overlooked. Make sure the home is clean, tidy, and even staged with some basic furniture, art on walls, towels, kitchen items on counter, and generally to look nice and welcoming to a new tenant.
Most smart phones take good enough quality photos if you have good natural light. If you don’t have a good quality camera and somehow don’t have a friend who’s an amateur photographer (isn’t everyone these days?) then pay the few hundred dollars to get professional photos taken. You’ll have these for use forever with the rental property investment, so invest in your investment. I guarantee this will pay you back 100 fold.
In a tenant’s market, you need to compete with other landlords offerings. Many large scale professional landlords are offering various incentives. Here’s a list of the ones we’ve had the best success with:
The above all typically cost you less than a half month rent, and are able to be found for under $400-500. But they have much more tangible benefit to the tenant, and can entice them towards your property vs others because they get something ‘for free’ that they get to keep. Only give it to those who qualify and only in month three after they have paid the first two months and security deposit on time. That’s part of the “qualification.” You can have a simple one pager written up about the incentive program to give with the lease signing.
Where to advertise, in order of priority.
Treat them like a customer. It’s not the few hundred dollars per month in cash flow you will make during their tenancy, it’s the total annual rent paid during the term of the lease. How would you expect to be treated if you were making a $15,000 purchase? Well that’s what $1250 per month in rent equals. Plus the tenant is paying down your mortgage for you, and allowing you to take advantage of property value appreciation, so thank them for this.
Good luck, have fun with it, and enjoy providing a quality home to wonderful people for a profit! Real estate investing is a wonderful business.
PLEASE SHARE this article with other landlords you know who may be having trouble filling vacancies.