We’ve talked about it a lot in previous posts, so it’s no secret that the real estate market has been a bit of a roller coaster in the wake of the Covid pandemic. After years of eviction moratoriums and incredibly low interest rates on rental loans, housing prices soared, and now interest rates for long-term rental financing have swung up to highs not seen in well over a decade. The rental market has also been caught up in the craze with monthly rents increasing by 16% in Baltimore throughout 2021, and still climbing in many cases.
For landlords and tenants alike, this has pushed some unique challenges into the spotlight. It’s tough for renters to find affordable housing, and it’s equally as difficult for landlords to find tenants that can guarantee that rent will be paid consistently on time on a monthly basis. Looking at this from an investor’s perspective, it’s important to know what steps you can take to make sure that you’re doing all that you can to attract the best tenants to lease your properties to.
Finding Tenants Starts With a Strong Listing
Perhaps the most important step in renting your property is writing a great listing that will attract attention and showcase your property in a desirable light. By having quality photos (and lots of them), video tours, and detailed descriptions, you can grab the attention of renters who are seeking well-managed properties.
Make sure to also highlight benefits of the greater neighborhood – young families who are not yet able or looking to buy may be seeking a rental in a great school district, for example. Young professionals may be on the lookout for easy access to nightlife. Ultimately, the more you’re able to offer a prospective tenant, the more likely you are to attract quality renters.
Price Your Property Competitively
This goes hand in hand with building a strong listing – but be realistic with the rent that you’re going to be able to charge. If your rent is too high, prospective tenants who are considering multiple properties may be less likely to choose yours, even if the other property has fewer features and amenities. Always make sure to stay in touch with how your local rent market is fluctuating.
To find out how much similar properties are renting for, be sure to regularly check in on rental search sites like Trulia or Zillow. You can create a profile and sign up for alerts when prices for similar properties increase or decrease, which will give you a good idea of where you should stand with pricing. It also can’t hurt to enlist the services of a real estate agent to assist in setting your rent prices as they’re most in touch with the day-to-day status of the market — and they can help you find tenants as well. When evaluating new acquisitions, make sure the numbers make sense, too — you want to be able to cover the cost of an investment property mortgage while still keeping rent at a desirable point.
Thoroughly Vet & Screen Your Tenants to Ensure a Good Fit
While there’s no need to snoop into someone’s personal/private life in order to determine whether or not they’ll be a good tenant, it’s still important to do a basic review of a renter’s history before approving an application and issuing a lease. Check your renter’s credit and ask for references from previous landlords. Request at least two recent pay stubs to verify income, and you can even contact their employer to verify their employment if necessary. In the current climate that we’re in, this is an especially important point and it can be difficult as millennials have embraced the gig economy and could have multiple streams of irregular income. In those cases, don’t be too shy to ask for bank statements to prove income before entering into a lease agreement with a tenant.
Consider Hiring a Professional Property Management Company
Tenants who have flawless rent payment histories often expect for the property that they’re renting to be managed competently. Nobody wants to deal with a late night lockout without an ability to get a hold of anyone, nor do they want to worry about how long it might take for someone to come service the HVAC if the heat goes out in the middle of winter. Having a reputation for being responsive to tenant needs goes a long way in attracting the best possible renters.
In addition, professional property managers often have quick access to resources that you might not have on your own – a network of contractors and handymen, access to background checking software, experience in handling problems with tenants, among others. While this isn’t an exhaustive list of the advantages of working with a professional property manager, they should be factors that come under consideration when you’re looking to rent out a new property.
Even in a Tough Market, You Can Find Good Tenants
With limited choices on the market, tenants are bound to be very selective about where they want to live. You’ll have to meet their expectations by providing quality spaces with updated amenities, but that doesn’t mean that tenants are impossible to find. If you’re struggling to find quality tenants, consider everything you’re doing and what you could be doing differently to attract better prospects.
While we aren’t property managers, Pimlico Capital does have an extensive network of contacts in the real estate industry. If you’re a landlord or otherwise actively investing in real estate, give us a call at 410-855-4600 and we’ll be happy to talk with you about your real estate business. We have a ton of experience as investors ourselves.
Looking to purchase or refinance a new rental property? Check out our online investment mortgage rate calculator to see what terms you’re pre-approved for now!