There are three key things that landlords should understand about long-term vacancy in their apartments -- aside from the obvious point that it’s, well, not a good thing. After all, time is money in the landlord business. And timing is, too.
Avoid Long Term Vacancy in Chicago Apartments with These Strategies
The first thing is seasonality and how this impacts renter behavior. Chicago apartment renters typically move during the summer months. Ask yourself, would you go through the effort of moving during a Chicago winter? It’s not exactly fun. Keep this in mind as you prepare to list your apartment.
Market conditions are the second important thing for landlords to watch. Setting realistic rental prices will help secure tenants quickly. Even though an apartment may come with a host of premium upgrades and amenities, such as new appliances or smart thermostats, the market will ultimately determine how much renters are willing to pay for their apartment rent. If the economy is experiencing a downturn, then don’t expect renters to leap at an apartment that appears overpriced compared to neighboring properties. Chicago renters are especially in tune with neighborhood sub-markets, so check out the price range for comparable units on one of Domu’s neighborhood pages for an idea of what other landlords are charging in rent.
And lastly, landlords should be aware of rent concessions that have become popular marketing tools in recent years. What are rent concessions? These concessions often get labeled as “free rent” for a specific period (up to two months in some cases), but they’re actually a lower net effective rent. Lower, that is, than what that apartment could potentially charge in favorable market conditions.
Armed with these three key market factors, landlords can devise various strategies to minimize long-term vacancies in their Chicago apartments.
Chicago Renters Tend to Search for Apartments in the Spring
If at all possible, try to position an apartment lease so that the expiration date coincides with the peak rental season. Most renters prefer moving in the summer months, and looking back at several years’ worth of listing data on Domu, the most common time for new apartment leases was July 1. A significant amount of apartment searches are conducted in the 90 days prior to July 1, and that makes spring the thing when it comes to posting apartment listings.
See Also: Top 3 Most Expensive & Most Affordable Chicago Neighborhoods
Renters Are Looking Out for Deals Later in the Rental Cycle
Tenants are increasingly familiar with concessions and incentives from landlords in Chicago’s apartment rental market. These incentives can take various forms. Some landlords offer free parking, some will waive move-in fees, and some go as far as offering free rent for a month or two on longer term leases.
With this knowledge in mind, renters who’ve waited out the highly competitive season in spring and summer are keen on finding deals. Making one or two concessions could make the difference in securing a tenant and leasing the unit.
Related: Are Move-In Fees the New Norm?
Plan Ahead to Attract Apartment Renters in Peak Season
The timing of a standard 12-month lease agreement may not line up with that popular renewal window. So what should landlords do? Try to amend the lease so it matches the popular moving season, and see if tenants are willing to sign either a long-term lease or a short term rental agreement. In the latter case, try and time the lease expiration date with the onset of the peak rental season in the spring.
Adding a concession can be a powerful incentive to attract tenants. Have you considered an offer such as discounted rent for the first month of the lease? Or maybe free parking? See what’s doable for your bottom line and then try these modest concessions. Whatever happens, don’t give up hope! There’s a renter out there for practically every apartment if the price is right.
Thinking about revising the lease for your unit? You can download a copy of Domu’s model lease here.