Taking the time to find the right tenant for your property will save you hours of unnecessary work down the track.
Blogger: Michael Gilbert, co-founder, Cubbi
In part one we discussed the consequence of choosing the wrong tenants for your place and covered how to prepare your property to attract the right tenants (steps one and two). If you missed it, click here to read part one.
Continuing from the end of part one:
3. The price is right
Now that you have your house “tenant ready”, it’s time to decide how much you will advertise your property for.
I can totally understand the temptation to price it at $15 more as that’s nearly $800 a year extra. That could pay for your landlord and building insurance in one hit.
The problem with pricing your house too high is the extra time it takes to lease it and the desperate tenants you might attract at that high price. You might really need that landlord insurance after all!
Here’s an example:
Let's say you determine your property is worth about $400 per week, but you try for $415.
If the property sits vacant for two weeks longer while you're trying to find tenants, that’s $800 lost. The extra rent you thought you would get to pay for insurance is used up while your house sits vacant.
It gets worse. After six months, the tenant becomes slack with their rent payments and the routine inspection shows an extra person living in the house. You realise these tenants only applied for your property because they could not get anything else.
It’s a balancing act.
I have found that pricing the property at or just below (around 3-5 per cent) my competition works well long term. Here are the benefits:
- Find a tenant quicker. Little or no vacancy between tenants
- Find a tenant who pays rent on time and looks after the house
- Spend less time managing the property
- Less stress
- Longer term tenants. Less likely to re-advertise again in six to 12 months time
Now that you have a good understanding of the balancing act, it's time to work out what a good tenant is happy to pay for your property. It’s not that hard, just put yourself in their shoes (again).
When tenants are searching for properties online, they’ll have a good idea of what they are after and they hone in their search for that particular property. They get very good at spotting an overpriced property because they have been through numerous places with the same number of bedrooms and price range as yours. Even better than most agents.
You need to try and do the same. Jump on to realestate.com.au and use the search criteria (property type, number of bedrooms and price) to narrow the competition down.
Start your search using just one or two of the search features (type, beds or price) then keep narrowing it down until you have three to five comparable properties. Dig deep and read every word of their ad description and study the photos.
This will take you about 10 minutes for a detailed insight into your competition and where your price needs to be.
4. Show great photos in your ad
The photos in your ad play a big part in getting the right people to inquire about your property. Not making the effort to get good photos of your house on property websites can backfire.
It’s worth waiting an extra day to get the right photos. Most prospective tenants only give you one chance. (If they’ve seen your ad and dismissed it, there’s some effort and tricks involved to get them to click on your ad again.)
Your photos are the greatest representation of your property.
Remember that. If you have bad photos, you know what your potential tenants are thinking about your house before they even contact you (if they even bother to).
Alright, so it’s clear you need to get as good photos as you can.
Recently, a professional property photographer taught me 11 great tips for taking great photos that work even with my iPhone. Here are five I feel are very useful:
- Use available lighting: Open windows and curtains. Turn on all lights including lamps and even the rangehood
- Shoot low, not high: Get down low enough until the walls are vertical in the shot. This is my favourite tip
- Get wide: Push yourself back in the room to get as much in the photo as you can
- Hold the camera still: This helps reduce any blurriness
- Download image-enhancing apps: These help make your photos pop
Remember the example I gave about the retired couple whom I believed would be most suitable for my house? Taking them into consideration, I would include a photo of the golf course and shops to really help them see all the benefits of living in the area.
5. Create a killer advert
Let's do a small recap.
You know who is most suitable for your house.
Your house is in presentation-perfect condition.
The price is all sorted.
The photos are done.
All you need to do is put everything together. Upload your photos and enter in the rent amount.
Hang on… you do need to write a good description tailored to your “newly retired couple” (your target market).
In order to keep this precise, here’s my top three tips to write a great heading and description:
- Catchy heading that avoids repeating what they already know: DON’T include the following in your heading: Number of bedrooms, property type, suburb or price. Focus on the main benefit (maximum of two) that is likely to catch the attention of your most suitable tenants. For the example above, instead of “Three bedroom house in great location”, I would write “Quietly tip toe to the golf course”
- Focus on your most suitable tenants: Write your ad as if you're speaking to your most suitable tenants face-to-face. Focus on what they would want to hear
- Have a good call to action: For example, “This house has always leased in a few days so I recommend getting in now before it's too late”
Check out part three of this super blog. I have even included four special bonuses to help you take action.
About the Blogger
Co-Founder of Cubbi. Rent your own place on Cubbi without using a real estate agent.
Started as a real estate agent nine years ago, Michael has been examining the property management process in Australia and finding ways to improve it. His goal is to make renting for both landlords and tenants a simple, streamlined process with Cubbi.
As a nationally licensed real estate agent, Michael relishes the task of helping people with all kinds of real estate issues. He blogs regularly at Cubbi to share property management tips and strategies which are important but sometimes overlooked.
Get bonus - Download the 4 bonuses from my 8 Step Guide to finding great tenants.