After two of my tenants decided not to renew their leases and left me with two surprise vacancies, I finally was able to get my last vacant unit rented last week. The rental market still is busy with people looking for places to rent. It's just more proof that the housing market is stressed by foreclosure and economic uncertainty. Everyone needs a roof over their head, they are just less confident when buying a home and so they rent instead. Regardless, I am grateful to have the tenants.
I wanted to know my annual vacancy rate for 2010...and then I got curious and ran the numbers for the last seven years that I have been tracking rents. Here is my vacancy record:
As you can see, when you have one rental and you have one vacancy a year (which is normal and what you would expect with tenant turnover) it can put your vacancy rates pretty high. However, if you can add units to your portfolio and manage your lease lengths appropriately, it is possible to keep that number down. I had a large number of my tenants renew their leases this last year. That helps keep your vacancy rate down significantly.
Keep in mind that every time a tenant moves out you have one-time expenses. Re-keying, cleaning, maintenance, touch-up paint, and other tasks need to be performed to make sure your unit is ready for the marketplace. These expenses need to be considered when putting together your rental strategy.
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