An investment property should be occupied 100% of the time. Read Nora Vaula’s tips for how to find a long-term tenant and keep your investment property always occupied.
“The tenant is central to our way of working. A satisfied tenant who pays rent on time is the key to a successful property investment. Yet it seems like many operators forget that tenants are first and foremost customers, and they expect good service. At Asuntoverstas we’ve made this one of our guiding principles, which in turn has enabled the growth of our business.
We manage and find tenants for over 6,000 apartments. We’re in contact with tenants every day, which means that we know exactly where and what kinds of properties our investments clients should be looking at buying. Our parent company Premico Group is constructing 300–400 new rental units for its clients, making our up-to-date knowledge of the rental property market very important when making investment decisions.
For these decisions, the old adage holds: the three most important things are location, location and location. Does the area have good services? Is it connected to good transport? How will it look in ten years?
When planning housing development, we weigh in on the size and type of apartment that make sense in that area and market. Premico’s clients don’t always recognise that for example larger studio apartments can be challenging to lease – too small for two, too expensive for one. As planning progresses, we can help by commenting on floor plans, kitchen designs and other practicalities that potential tenants consider when looking for an apartment. Sometimes even the architect overlook these details, but they are key to a working, highly-rentable apartment.
After location, the most important thing is the condition of the apartment. Tenants are discerning and looking for better equipped apartments than ever before – a 180-degree turn from the mid-90s when I started in the business. Tenants expect apartments to be in good condition and well-equipped, and they’re ready to pay for it; apartments in poor condition may be hard to shift, even at a low rent. In my opinion, this is the right development, and a sign of a healthy market.
In short, the standards of someone looking to rent no longer differs from those of someone looking to buy.
It is old-fashioned to think that a rental property can be less well-equipped or finished with poorer quality materials than those occupied by their owners. Tenants only need to give one month’s notice. Good tenants are not easy to find, and we aim to have all of our properties at 100% occupancy. To reach this goal, we need to make sure that the apartments are in good working condition.
In the past twenty years, the market for rental properties has changed, with those looking to rent largely falling into two distinct groups. Potential tenants include many different kinds of people, making it harder to find trusted tenants. The recession has left its mark in bad credit ratings among some people looking to rent; conversely, those whose finances are in order have lots of options. In this challenging market, our processes and experience provide our customers with real added value.
To keep occupancy rates high, we’re constantly battling to have the correct rental rates. Is it worth lowering rents by thirty or forty euros and get the apartment rented quickly, or should you wait a month without a tenant to get what you’re asking for? A professional investor will be thinking about the bigger picture, including the rates of the whole building, whereas private landlords tend to be more flexible. An active, professional agent will help you make the right call.
Tenant-focused consumer studies have shown that one of the biggest pain points while renting an apartment is the slowness of communication with an agent. We’ve made sure to pay special attention to keeping all communications speedy. An active agent is of paramount importance in finding a good tenant with solid personal finances.”
Nora Vaula is the EVP of Premico Group subsidy Asuntoverstas Oy. Asuntoverstas serves its rental investment clients from beginning to end – starting with the development and construction of your buildings. Once completed, Asuntoverstas helps with finding tenants and property management.