Rental prices in Los Angeles are still higher than in many other markets across the country, but they’re not as strong as they were before the COVID-19 pandemic arrived. It will take some strategic pricing to stay competitive and also profitable in a down rental market. The best thing you can do is consult with Los Angeles property managers so you can get an idea of exactly where the market is and how your own rental value fits into it.
Deciding on a Rental Value
If you continue to price your property at the higher end of what you were charging before the exodus of tenants that resulted from the pandemic, you’re going to have a vacant home. Vacancies are expensive, so be flexible with your rental amount. If you were charging $3,000 per month before the pandemic, it’s unlikely you’ll get that much now.
It may feel challenging to find a rental value that you’re comfortable with, but remember the goal right now is to find good tenants and attract them to your property.
Check Your Competition
During a down market, it’s more important than ever to gain an understanding of how the local rental market is behaving. Find out what homes similar to yours are renting for. Take a look at how long they remained vacant and what they did to attract tenants. Did other property owners make upgrades to the property in order to attract tenants faster? Did they offer extras like free Wi-Fi or included utilities? Find as many specifics as you can so you know what you’re up against when you put your own property on the market.
Offer Incentives to Avoid Long Vacancies
You may find you need to motivate renters by offering incentives in addition to a reasonable rental amount. For example, you might want to offer a free month of rent if they sign a lease within a week of seeing the property. Or, you could offer something tangible like a gift card or a new iPad when they sign a lease.
Many apartment buildings offer discounts on rent, lower security deposits, and free utilities in order to attract tenants. You need to start thinking in these creative ways when you’re trying to reduce your vacancy time and find a good tenant willing to pay rent in a down market.
Focus on Tenant Retention
One thing you don’t want to do in a market like this is lose your existing tenants. Focus on providing a really outstanding rental experience so you can be sure you keep your best tenants. When it’s time for a lease renewal, consider skipping a rental increase this year. It will be worth it to you, especially if you’re able to retain a tenant who may have considered vacating. Avoiding those vacancy and turnover costs will save you thousands of dollars in the long term.
We know a lot of rental property owners are worried about pricing their homes too low. It may seem like getting back to a comfortable rental level will be impossible. We can help you establish a rent that keeps you earning consistent income. Contact our team at EGL Properties for any of your Los Angeles property management questions.