How to Increase Occupancy Rate: A Property Management Guide
Maintaining high occupancy rates can have a huge influence on the success of property management companies.
A vacant unit represents lost revenue for the business, hindering the company's overall return on investment (ROI) and profitability.
In this blog post, we'll explore the benefits of a high occupancy rate, how to increase it and its impact on ROI.
- Benefits of Improved Occupancy Rate
- Tactics for Improving Your Occupancy Rate
- How Higher Occupancy Rates Improve ROI
- How Property Management Software Makes a Difference
Benefits of Improved Occupancy Rate
Maintaining high occupancy rates can result in several benefits for property management companies.
Filling vacancies and keeping tenant satisfaction high can help build a positive reputation for your business.
A high occupancy rate is a good sign that you're doing something right. Satisfied tenants are far more likely to offer better reviews, leading to increased referrals and a greater pool of potential tenants.
Increased Operational Efficiency
Higher occupancy rates lead to economies of scale, which can reduce costs for your business. An economy of scale is when costs are lowered due to increased production, meaning costs are further spread over more goods.
With a larger tenant base, your business can optimise its resources, streamline processes and improve profitability.
Stronger Negotiating Power
The better your occupancy rate, the more negotiating power you'll have when dealing with suppliers and service providers.
The more tenants you have in your properties, the bigger the deals will be for suppliers, giving you a chance to target cost savings on these services.
Tactics for Improving Your Occupancy Rate
Now you know the benefits of what improved occupancy rates can deliver to your business, how do you improve them? Here are four strategies on how to increase occupancy rate.
1. Focus On Tenant Retention
Prioritise tenant satisfaction to keep tenants in your properties longer and encourage renewals.
To do so, ensure you deal with maintenance requests swiftly and maintain clear lines of communication with those in your properties.
2. Streamline the Application Process
There's no way to avoid people moving out of your properties completely — what makes a difference is the time it takes to fill the vacancy. The shorter the time, the higher your average occupancy rate will be.
By simplifying the application and screening process, you can significantly reduce the time between a vacancy and new tenant occupancy. This can be done by utilising online application forms, digital document signing and tenant screening services to boost the speed of your process while remaining thorough.
3. Boost Property Appeal
It goes without saying, but by regularly maintaining and upgrading your properties, you'll be boosting your chances of tenants wanting to occupy them. These maintenance tasks can range from fresh paint to modernisation, but they all make a difference.
You should also have one ear to the market to ensure pricing aligns with the current trends.
4. Don't Forget Your Marketing
Marketing and advertising play a huge role in shouting about your vacancies. A comprehensive marketing strategy will ensure you'll be front of mind for anyone searching for a property.
Utilise channels such as social media, online listings and local advertisements, emphasising the features and benefits of the properties in your portfolio.
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How Higher Occupancy Rates Improve ROI
There are many ways that occupancy rate plays a part in the ROI of a property management business.
Lower Vacancy Costs
Vacant properties can be costly. Think advertising to attract new tenants, maintenance to protect from deterioration and lost rental income.
Maintaining higher occupancy rates will remove the need for these costs, boosting your financial returns.
Increased Property Value
Occupancy is often linked directly to property value, as higher occupancy rates often demonstrate a greater demand for the space.
With fewer properties available in a high-demand space, chances are you can charge a little more for your properties.
Steady Cash Flow
The more people living in your properties, the steadier your rental income will be, reducing the overall risk of cash flow interruptions.
With a consistent, expected cash flow, you can meet financial obligations on time, including mortgage payments, operational costs and maintenance expenses.
How Property Management Software Makes a Difference
A comprehensive property management system can benefit your business and help you boost occupancy rates in several ways.
Improved Tenant Communication
Property management software offers centralised communication channels, so you can keep tabs on all internal and external communication.
This makes it easier for you to address requests, concerns and maintenance issues in a timely fashion, leading to increased tenant satisfaction and retention rates.
Efficient Application and Screening Processes
Software can help you facilitate an online application process, simplifying the collection and organisation of tenant information.
You can also run automated background checks and produce tenant screening reports, providing the information you need to make speedy decisions on potential tenants. The faster your process, the less time it takes to fill vacancies.
The Data for Your Decisions
Property management systems provide valuable data and analytics to make key business decisions.
You'll be able to spot any emerging trends, optimise your rental rates, target areas for improvement and make informed decisions — all of which should work towards driving your occupancy rates.
What Impact Would Property Management Software Have on Your Business?
It's not just occupancy rates that property management software can improve. Think efficiencies, automation, accounting functionalities, streamlined maintenance management and more — all of which can lead you towards being a better business.
But how do you know it's worth the investment? That's where we can help. We've put together a simple calculator that tells you the ROI you can expect from onboarding Propman property management software.
Fill in a few details to generate your figure. Get started by clicking below.