When the economy takes a downturn, the rental market is one of the first to take a hit. For property owners and operators, this means difficulty qualifying renters and increased risk of rent defaults, vacancies, lease breaks, holdovers, and more.
A recent survey by Bankrate places the odds of a recession in the next 12-18 months at 65%. If you own or operate a rental property, this is the time to start planning and taking measures to safeguard your business.
In this blog, we'll take you through a few ways to prepare yourself for the uncertainty of what lies ahead, plus share resources and services you can leverage to do so.
1. Get creative with pricing and amenities
Offer free rent for a month, discounted amenities, or products like Security Deposit Replacement. Security Deposit Replacement allows potential renters a low-cost alternative to shelling out a traditional security deposit, keeping more money in their pocket at move-in and helping you maximize lease conversion rates.
2. Be Flexible With Your Requirements
When renters are lined up outside your door, you can be picky about who you let into your rental units. However, during a potential recession, this may not be the case. Products like Lease Guarantee from TheGuarantors can help property owners and operators convert more renters, even if they don’t meet your typical renter profile, while protecting operators against losses from rent defaults, vacancies, lease breaks, holdovers, damages, and more.
3. Be diligent when screening applicants**
You’ll have more room for error during a strong real estate market, but during a recession, even one bad renter can put a damper on your business.
TheGuarantors’ innovative rent coverage can help you screen and qualify more renters who may not get approved with standard criteria. With our AI-powered technology, we provide customized coverage to increase your conversions while keeping you protected as a property manager against rental income loss. Our risk model considers over 1,000 data points to predict renter risk with high accuracy.
4. Increase renter retention rates
If you’ve got happy renters and are trying to keep them from turning over during a recession, being flexible with payments that are a few days late can help strengthen the relationship and their loyalty. Also, you can let your renters know that you appreciate their business and want to keep them around by communicating with them and keeping them engaged with a birthday card, a holiday gift, or even hosting a small renter event.
Get Your Rental Portfolio Recession-Ready by Partnering with TheGuarantors
No one can truly predict exactly how a recession will affect the rental market. But one thing that's clear from previous recessions is that they can be difficult for both renters and property owners. By partnering with TheGuarantors, not only can you help potential renters by providing them with a better chance to qualify for your units, but you can also stay prepared for an economic downturn and ensure your bottom line stays stable, even when the economy doesn’t.
To learn more about TheGuarantors’ services and products for property owners and operators, get in touch today.
