Risks of Having a Vacant Rental Property

Key Takeaways

• A vacant rental can impact your income, so it’s smart to have a plan in place to keep your property protected and appealing.
• Simple steps like securing the home, staying on top of maintenance, and boosting curb appeal can go a long way.
• Finding reliable, long-term tenants starts with a thorough screening process and fair, market-based pricing.
• Partnering with a property management company like Limehouse Property Management can help keep your rental occupied and performing at its best.

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As a landlord, extended vacancies can be costly to your bottom line! Admittedly, though, vacancies are inevitable in the life of any landlord. However, the goal is to ensure that they last as short a period as possible. This will ensure that you minimize financial loss and other related risks.

In today’s blog, Limehouse Property Management will walk you through the risks of having a vacant property and what you can do to minimize them.

Risks of Having a Vacant Rental Property

Loss of Rental Income

Having a vacant rental unit simply means losing money every month it stays so. This can significantly impact your bottom line, especially if it goes on for extended periods. Specifically, you’ll be losing money on certain ongoing expenses, such as mortgage payments, property taxes, and repairs and maintenance.

To mitigate against significant financial loss, there are certain things you could do. For one, you could set up an emergency fund to cater to such expenses after your property becomes vacant.

Another thing you could do is conduct market research to ensure you’re charging the right rent amount. It may be possible that you could be overcharging tenants, which may make it harder for you to attract desirable tenants.

Liability Risks

Just because your property doesn’t have a tenant doesn’t mean you aren’t responsible for injuries or accidents happening at the premises. You may still be held accountable for certain liability risks even by individuals with unauthorized access.

To prevent such an issue from arising, you may want to protect yourself by obtaining liability insurance coverage. Luckily for you, most standard landlord insurance policies do offer liability coverage.

Another thing you could do is consult with a professional to help you understand and mitigate liability risks effectively. A reliable property management company like Limehouse Property Management could help you in this regard.

Property Damage and Vandalism

This is another risk that you may be exposed to once your rental property falls vacant. Without a tenant, your property may become vulnerable to property damage, vandalism, and theft. Tenants help deter potential vandals and report repairs and maintenance issues promptly. However, without them, your property may be at risk of damage.

As you try to find another tenant to rent the property, there are a few things you could do in the meantime. You could deter potential vandals and thieves by putting in place some security measures.

For example, installing security cameras, motion sensor lights, and alarm systems. You may also want to inspect the property regularly. This can help you address any potential areas requiring repairs and maintenance. Alternatively, consider hiring a reliable and professional property management company to handle everything for you.

Squatters

A vacant property is often a prime target for squatters. Squatters often gain entry into a rental property through trespassing and don’t pay any fees or rent to live on the property. Getting rid of a squatter can be a lengthy, costly, and stressful experience. You’d have to go through the same process of removing a tenant who has violated a term of the lease.

To avoid such a scenario, there are a few things you could do. First, secure the property by ensuring it has sturdy locks and some security features in place. You’ll also want to regularly inspect the property to check for any signs of unauthorized entry.

And in the unfortunate scenario that you do get a squatter living on your property, you’d want to make sure that you act fast to remove them. Begin by serving them an eviction notice. If they move out by themselves, great! But if they don’t, file an unlawful detainer lawsuit in court and follow the entire eviction process judiciously.

Property Value Depreciation

Vacancies can negatively impact a neighborhood’s overall appeal, which can lead to declining property values. To avoid this, there are some things you could do to reverse the negative impact. You could try to boost your property’s curb appeal.

This can include doing things like maintaining it, making needed repairs, and taking care of the landscape. If you have the budget, you may also want to invest in certain upgrades to boost its appeal in the rental market.

Another thing you could do to improve its marketability is to charge a fair rental price. Conduct a comparative market analysis to determine the best price to charge tenants. Remember, the best price is one that is neither underpriced nor overpriced. It’s at the Goldilocks zone.

Tips on How to Minimize the Risks of Having a Vacant Rental Property

Make the Right Rental Upgrades

If you’re struggling to rent to the right tenant, you may want to invest in some upgrades to help with your property’s desirability. Some can even be done on a budget. For example, refreshing tired-looking walls with a fresh coat of paint, deep cleaning the property, or keeping the lawn fresh and tidy.

Rent to Good Tenants

Renting to good tenants in the first place can help minimize your turnover rates. A good tenant not only pays rent on time and cares for their rented premises, but also renews their lease multiple times.

To rent to long-term tenants, be meticulous with the screening process. Check for their credit ratings, income level, rental background, and employment status, among other things.

Hire a Property Management Company

Whether you’re just starting or are already an experienced landlord, hiring a property management company can make all the difference.

A good property manager can help sort out all your challenges. Whether that is finding a long-term tenant, maintaining your property, responding to issues, collecting rent, or determining the right rent amount.

Conclusion

A vacant rental property is hard! More so, if it continues for extended periods. Luckily for you, there are certain things you could do as aforementioned.

But ultimately, working with a professional can be the best solution to any or all of your landlording challenges. Limehouse Property Management can handle all your Virginia Beach property management needs. Get in touch to learn more!