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Property Management – Northridge – Fill the Vacancy

NORTHRIDGE PROPERTY MANAGEMENT

Priority No 1 – Fill the Vacancy

Here’s why I believe, as a rental property owner of nearly 30 years, that filling vacancies should be the number 1 priority for landlords and property managers. It all comes downs to cash flow. Continual cash flow is the “life-blood” of the landlord business. When properties are all filled, you have maximum income to help you cover all your expenses, management or maintenance challenges, and also keep your property upgraded so that the properties continue to keep good residents longer and attract the most ideal residents. Without cash flow, its so easy to go into a downward spiral of poor property upkeep, lower quality residents, unpaid rent, evictions, and vacancies. Eventually you may find that you have the inability to make mortgage payments, and eventually you are forced to sell or give up. This indeed has been the sad fate of many landlords.

When it comes to cash flow, lots of short-sighted landlords focus on what I consider the easy stuff, like how to cut costs through maintenance and repairs, but they somehow forget or don’t realize that they are losing a lot more money throughout the year from vacancies and uncollected rents (from no-pays and evictions). The reason I say that repair issues are the “easy stuff” is because fiddling with a repair problem often does not take as much thought, planning, and landlording skill as it does to get a vacancy filled. I’m not saying any of this to offend those of you who take pride in your repair skills. I’m speaking as a business owner. The goal of a business owner is to have a business that operates at maximum profit. A vacancy is costing the landlord far more money sitting empty than a minor repair being attended to. And yet many landlords I know have vacancies that have been sitting empty for weeks and even months, but the landlord still has minor repairs on the top of their “To-Do” list, instead of filling the vacancy.

If the properties are filled with paying residents, you can pay someone to get the repairs done (even if you mistakenly over pay on a job) and still have cash flow for other matters.

While cutting your costs is helpful, I want to challenge landlords to see that their first priority should always be to fill any vacancy. Just like in the restaurant business, it’s vital to “turn tables” as quickly as you can and seat new residents. In the rental business, once you have a vacancy, it is vital to fill it. And I not only want to challenge you, but I want you to challenge yourself to fill any and every vacancy within 72 hours, or at least within 7 days to maximize your rental income and to stay on track toward building your net worth with rental properties. Maximum income allows you to survive in this business and handle “bumps” in the road on your journey to financial success.

Let me be clear. When I say priority number one is to fill vacancies, that does not mean that I don’t give great concern toward “stopping the bleeding” and retaining or keeping current residents longer, satisfied and paying (which I consider the second biggest priority in this business). In fact, some would argue that stopping the bleeding is equally if not more important than filling vacancies. However, when you have maximum cash flow coming in, I have discovered that it is far easier to keep current residents happy, because you will have money to make sure all of their concerns are quickly handled and you will have enough income to regularly upgrade the look of their property on both the exterior and interior. And all this MUST be done, or else you will find yourself dying from the lack of cash flow “blood” and not able to retain whatever little bit that you do have.

By Jeffrey M. Taylor

Since 1946 the Carnahan name has had a reputation for honest and ethical Real Estate Property Management services in the San Fernando Valley, Santa Clarita Valley, Burbank/Glendale, Los Angeles, Westside and Conejo Valley areas.

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