Vacant property reports and dealing with vacant property
Best practice advice
The following information is from chapter 4.5 Vacant property reports and dealing with vacant property of the Property Management Excellence (PME) manual
When a rental property is vacant, lessors can be most vulnerable. They are vulnerable for a number of reasons which include the stress of not having rental money to assist in paying their mortgagees and also they are also in a position where unethical agents may target them in the hope of gaining their business. This could result in the agency currently managing the property losing the business.
It is important that property managers have utmost empathy with lessors during this period and that regular contact is made with the lessor. Sometimes making contact can be difficult if there is no or little feedback to provide. Contact with no feedback for the lessor is better than no contact with the lessor at all. If the lessor does not hear from the agency during this period, it would be quite common that they may believe that nothing is being done by the agency to rent their property.
A recommended procedure for vacant property is that lessors are phoned at least twice a week and provided feedback as to what is happening with their vacant property. Ideally the lessor should be contacted every day where able. The lessor is recommended to be contacted prior to showings and inspection appointments and after any showings of the property.
A written report should be completed at least once a week (plus the phone calls) to advise the lessor of what is happening with the property and information about the market in general. The report to the lessor should outline the number of inspections carried out, the number of applications taken from tenants, any applications received plus recommendations for the lessor to consider in making the property more attractive such as new curtains, paint or carpet. The report should also include feedback from tenants who have viewed the property and who have not applied. Also feedback should be included as to why there have not been any inspections. For example; the reasons tenants have not applied for the property may be;
Property too small
Yard not fully fenced
No security screens
Rent too expensive
If the rent is too high, comparable properties should be provided to the lessor accordingly in writing to assist in education about the current market place. Recommendations of course should then be made by property managers to the lessor for the rent to be lowered to meet the market.
Property managers should consider providing links from property websites to the lessor showing comparable properties and photos; properties that are at the rent the lessor is currently wanting and another of properties where the property is better placed. This practice is usually a good indicator to the lessor that they may need to reduce their rent (if overpriced).
Property managers should also show lessors how many properties are currently vacant in the area so that they are aware of what they are competing against during this time.
If the market has significantly dropped, provide the lessor with as much factual written material as possible as to why. For example, the closure of a major employment facility in the area has caused many to leave the area and created a market of oversupply with little demand.
If a lessor who has a vacant property and is being a little difficult, remind them respectfully that whilst their property is vacant, our agency is not making money either. Use language such as please know that we are doing all we can and will continue to keep you informed. As difficult as it can be at times, ensure that the lessor is phoned at least twice per week even when there is no news. Remember when the property is vacant, the client is most likely fretting and worried about their mortgage and financial situation. Stay professional and keep them informed as much as possible.
A minimum three ‘touches’ a week should be made with the lessor; one touch being in writing such as the feedback report mentioned above and two phone calls. Any time there is possible interest in the property from prospective tenants, phone, sms or email the lessor to advise of the prospective interest. Continually advise the lessor that the agency is working hard to rent their property.