What to Do If Rental Rates Are Staying Flat?: A Guide for Staying Solvent
The bill for your property insurance hits your mailbox and you let out a sigh of frustration. Your premium has increased again, and yet, you aren’t able to raise the rent on your rental properties to cover this added expense because rates in the area have remained flat. What is a landlord supposed to do under these circumstances?
There are a few key strategies that any landlord can use when faced with rising costs in a rental market that remains stubbornly flat. We seek to explore what some of those techniques are and how you can use them to ensure that you can remain in the game even if rental rates aren’t moving.
Work on Tenant Satisfaction
Focusing on tenant satisfaction might seem like an odd place to start when you are concerned about your own rising costs. However, this is precisely the area that you need to focus on. The reality is that it is far more cost-effective to retain a current tenant than it is to try to find another one. As such, you should do what you can to keep your current tenants happy. There are many ways that you can go about this, including:
- Promptly Responding to Maintenance Requests – One of the top concerns for tenants in any rental space revolves around getting their maintenance requests fulfilled. They want to live in a safe and comfortable space, and this means that they might have to call out for a maintenance service request from time to time. The sooner that you can respond to those requests and resolve them, the happier your tenants will be.
- Respect Their Privacy – Everyone expects and is entitled to a certain level of privacy while they are within their own living quarters. You should always be respectful of this fact and allow your tenants to carry out their day-to-day lives with the privacy that they deserve.
- Maintain Flexibility and Communication – Whenever possible, you should try to be flexible and understanding with your tenants. You might opt to bend some rules for them such as allowing pets in their space or working out a payment plan if they fall behind on the rent. Don’t let your tenants take advantage of your kindness, but always try to be understanding of where they are coming from as well.
Those are a few ways that you can improve tenant satisfaction in a meaningful way. Small improvements like this can have significant impacts on your ability to retain the tenants who already live in your rental properties.
Diversify Your Pool of Tenants
When rental rates aren’t moving, you can still take that time to expand your tenant pool and diversify the kinds of people that you are marketing to. It may be the case that you need to diversify the type of tenants that you are reaching out. The more diverse your pool of potential tenants, the more likely it is that you will enjoy stable and predictable income and growth. That can’t always be said when you limit the scope of people that you reach out to.
Diversifying your tenant pool may look like taking out advertisements on platforms that you haven’t before. It might also mean expanding your geographic reach to a larger segment of the population than you once did. When you do that, you can put yourself in a position to speak with as large of a segment of the population as possible.
Make Low-Cost Upgrades
Not every upgrade that you make to a rental property has to be costly to be worthwhile. In fact, some of the less expensive upgrades can pay off in spades when rental rates refuse to budge. These upgrades add value to the property, and that will pay off for you when rates start to climb again in the future. Those rates will eventually start moving again, and you certainly want to ensure that you are ready to capitalize on them when they do. Take the time while things are a little stagnant to put in those low-cost upgrades.
Be Patient and Wait for This Cycle to End
The world of real estate is cyclical, and you can fully expect that the rental situation that you are experiencing now is not the one that you will experience forever. Be patient and understand that rates will eventually climb once again. It is simply a matter of waiting until the tide turns and things begin to head in the right direction once again.