Marketing Strategies For Investment Properties in This Economy
One of the side effects of the current economy and number of foreclosures is an increase in the percentage of people relying on leased housing. As families lose their homes they have to live somewhere and rentals are often the only choice available to someone with a foreclosure on their credit history. Add on to the fact that some estimates show that in California alone twenty percent of foreclosed properties were rental properties all adds up to the fact that there are a flood of people looking to rent rather than own.
This would seem to be great news for owners of income property, but with the new renters there are also the fact that many homes being sold by financiers are being purchased by investors who have every intent of turning that property into an incoming producing property. The market just got more crowded and owners are now faced with increased competition for tenants. Move in Specials, first month free, decreasing rents and no security deposit are all common techniques to try and make sure your property stands out amongst all the others, yet they are not always the best solutions. Instead of jumping to a decrease in income and security, other tactics should be looked at. Reducing your income, which is exactly what most these tactics do, make sure you have exhausted all other avenues first.
Housing is an emotional purchase and any marketer will tell you people make decisions based on emotion. First and foremost you need to make your property as inviting as possible. It goes without saying that you need to make the outside look as good as possible, but take a look inside. Any real estate expert will tell you that a staged home is easier to sell than an empty one, the reason is it is easier for the prospective buyer, or in the case of income property tenants, to see themselves in the home if it has some kind of furniture in it. Staging companies are great resources and might even offer their services for a percentage of the lease. Property Managers or owners of a number of units may find it more profitable to buy a room or two worth of furniture and then store it for when you need it. The cost of furniture and rental space is probably less than the income you would lose if your vacancy extends into more than a couple months.
You can have the home decorated the nicest and have the best sign out front but if people are not driving by they are useless. Open up a classified add and you will see an overwhelming number of ads all saying the same thing ”Charming space with so many beds and so many baths in such and such neighborhood”, what does that tell you. If you own properties and do not have a website what are you waiting for. URL registration can easily be found for under twelve dollars a year, some sites even offer basic hosting with the URL or at the vary least hosting plans are very affordable. If you are not savvy in the ways of HTML there are companies that can build a website for you. Instead of just putting the standard verbiage you can now direct potential tenants to your website where they can view pictures, get community information and download application materials. This also gets the potential prospect imagining themselves in the home before they even view it. How cool is it if you show the place, getting an application right then and there.
Real Estate agents who are looking to sell a house often will hold an open house, a time for people to walk in and view the house. Yet this tactic is not as popular in the rental house, and is a missed opportunity to save time and to get your property rented. Set aside a Saturday or Sunday, advertise it in all of your normal outlets, making sure you set clear start and end times, and then see what happens. While sitting open houses for my wife I was surprised the number of time I was asked if the owner would consider renting the home. It is easier to get people to come to you one day as opposed to driving to the location every time someone wants to see it. Some marketing strategies save you money and some save time, open houses could save both. The day of put signs up directing people to your property, make sure you have all the necessary forms that potential tenants will need to apply for a lease.
Unfortunately not all advertising is free, and sometimes you need to pay to place an ad. Advertising is an investment and as such you need to make sure the money your spending is well spent. If you are not asking everyone who calls, to inquire about your properties, how they found out about the home; if you take only one tip and use it make this the one. Keep a tally of calls that come in, calls that lead to showings and calls that lead to signed leases. If you find that 95% of your signed leases are referred from one particular ad in a certain magazine, you can start to eliminate ads in magazines that do not get you the same exposure, this means you save money. Tracking referral sources also allows you to put the optimal message out there, or allows you to target which property you market in which publication. You may even find out that your best marketing tool is a good old lawn sign. Never waste money on an ad that does not work.
The bottom line is you do not necessarily need to spend money to make money. There are opportunities to take advantage of no cost to low cost advertising. If you do need to spend money, you need to make sure you are getting the most return on your investment.
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