August 13th, 2013 by Jim West
A recent national study* shows that professional property managers have much lower vacancy rates than the average.
The break down looks like this:
- Vacancy rate with a property manager 5.5%
- US Census Bureau average 8.8%
We decided to look at WPM’s current vacancy rate to see how we compared.
- Layton, Utah Office 3.2%
- Salt Lake and Utah County office 3.7%
- Bountiful office 1.8%
Why does a good property manager have a lower vacancy rate?
1. Property managers usually have really good systems in place for turnovers (getting an apartment ready to re-rent after a tenant moves out). They tell the tenant what their expectations are, know exactly what needs to be done, and use cleaning and maintenance professionals to get turnovers done quickly.
2. Property managers are able to advertise on many different sites before the property is vacant, and can get a new renter lined up before the old renter has even turned in their keys. WPM tends to have video tours their properties allowing potential tenants to view the property without disturbing current tenants, and assist those who are moving from out of state. In both cases video tours increase applications and showings of a property.
3. Happy tenants make good tenants. When important maintenance issues are resolved in a timely, professional manner it saves problems down the road with the tenant and with the property.
4. Careful tenant screening helps to get better tenants who are more likely to take care of the property, pay on time, and to stay longer.
5. No matter how well you screen you cannot predict the future, and you will have a time when a tenant doesn’t pay on time or at all. Property managers are more likely to take swift action in order to get the money owed by a renter.
6. Knowing what you can and can’t do legally is very important especially when it comes to fair housing laws and the fines connected with them. It stated in the original article from All Management Property that there is a steep learning curve, and in property management when the learning curve is steep it is expensive.
7. Most of WPMs turnovers cost the owner $100 or less and are mainly for re-keying the locks and are completed at an average of 5 business days. (Of course, if carpets need replaced or something similar it will be more.)
Investors usually look at a lot of numbers when calculating cash flow and the lucrative benefits of having rental properties, but it is very important to realize that sometimes it doesn’t save you money when you try doing something yourself. As the above numbers suggest property managers can lower your vacancy costs which increases your cash flow.
*The original survey was conducted by All Property Management. You can find their article here.