Note: ShowMojo has made this article available because we believe it contains information valuable to all property managers and owners. We recognize there are references to specific ShowMojo features, and we did include these to assist our user base. However, we believe that non-ShowMojo-users reading the article can readily envision how they might take similar actions in their own leasing environments -- to everyone's benefit.
There Is One Best Way to Have Almost No Vacancies
There are certainly a lot of opinions and options out there about how to keep vacancy rates low. And, depending on other factors you need to consider, we understand that no one options is always the right answer. But, at ShowMojo, we do believe there is one time-tested option that usually is the best.
Showing occupied homes with internal leasing staff is the most reliable way to eliminate vacancies.
There are significant upsides to a property management business when it has full control of its leasing process and has almost no vacancies. And, most important, you can implement this approach by leveraging many techniques that are (or, maybe, should be) well-known best practices in the industry.
The Return on Investment
Meeting prospective tenants during in-person showings provides two very powerful opportunities.
First, there’s the obvious opportunity to sell the place, and to sell the prospect. An in-person showing is, really, your one and best chance at that.
Second, there’s the opportunity to evaluate the prospective tenant before an application is submitted. With an in-person showing, you will see things that never would show on a rental application.
Do they let their kids run loose through the home? Do they just plop down on the tenant’s sofa?
Furthermore, the right sort of answers to in-person questions could help prospects who are not a fit understand why they might be better off looking somewhere else.
When it comes to the owner side of things, there is even more benefit here. The low vacancy rates that result from showing occupied homes will help you to retain your owners. And these same low vacancy rates are a great sales tool for new owners.
Regarding Lockbox Self-Showings
Let's take a side-step here for a minute to address lockbox showings.
ShowMojo supports lockbox-based self-showings and about a quarter of our customers do actively use them. Some of our customers use lockboxes all the time on all their homes. And that does work very well for them.
So we don’t want to exclude lockbox showings entirely here. Even when your focus is on in-person showings of occupied homes, there are times you might consider lockbox showings.
For example, for truly remote homes, when it is simply impractical to do regular showings.
Or, in the oddball case when a property does not rent before it is vacant. In this case, hanging a lockbox and allowing both in-person and lockbox-based self-showings is a great way to ensure that everyone’s schedule and showing preference is accommodated.
Finally, for those rare homes that very consistently rent within a week of going on the market, lockbox-based self-showings really could be the most practical option.
In-Person Showings of Occupied Homes: The Four Steps
Full disclosure: we do not plan on discussing anything magical here. This really is about taking the right steps in the right order. It is about being organized. And it is about following through on the plan you have put in place.
1. Do the Pre-Work to Show Occupied Homes
This first step starts before the home is even on the market. It starts with the current tenant. Specifically, you want to set the guidelines between you and the tenant, so you each know what to expect from one another.
The showing schedule will be the biggest thing. If you are using ShowMojo, creating and maintaining a showing schedule is almost effortless -- and so is Notifying Current Tenant about Upcoming Showings.
For anyone not using ShowMojo we have a strong recommendation: use a pre-set weekly showing schedule for each home: that is, two to four show windows per listing per week, at the same time each week. The benefits to this are huge.
A pre-set showing schedule greatly reduces your effort, because you’ve given the tenant all the notice they need about upcoming showings and you don’t need to think about this again. You definitely don’t need to call the tenant after each showing is set, or to beg for last-minute access. And I really cannot stress this point enough.
The most difficult part of showing occupied homes is working with the tenant. Publishing a reasonable schedule to the tenant upfront helps get buy-in from the tenant, since the tenant knows exactly what’s going on and can easily plan their life around the schedule.
Yes, this can mean a showing schedule that might not fit for every interested prospect. But there’s something really important to remember here: you’re showing the home while it’s occupied. If you waited to show the home until it was vacant, then no one would be seeing it. No one at all. And even if you were using an outside agent to show the home … well, that’s certainly going to have its own set of scheduling constraints as well.
Next, have a standard notification for the tenant about showings. Remind them that it is their obligation in the lease to keep the place presentable. Remind them whether it is their option to be there for the showing, or not. Remind them that the more helpful they are in this process the faster the place will rent and the sooner this whole activity will be over. In my time showing places I saw plenty of helpful tenants who, I’m pretty sure were not actually interested in helping me, but understood that a signed lease meant no more showings for them.
Finally, find out about the pet situation. Are there cats or dogs? Where are they kept? Are cats allowed to leave the house? Knowing details like this upfront is going to remove a lot of stress from this activity.
2. Pre-Market and Work the Schedule
You should already know how long it takes to rent a place in your market. Six weeks. Two months. Whatever that amount of time is.
Start marketing a week before you plan to start showing any home, with your showing schedule already in place. You can then spend the week just pre-filling the schedule, so you can start showing with a full schedule. ShowMojo has specific Pre-Marketing Features Built In, but this is also something you can do on your own.
Of course there will be the people who call and say they have to see the place right now. They can’t wait a week. They’ve found another place that they’ll settle for it instead, but they really like your place. It is inevitable this will happen. But, in this case, remember that you have chosen to pre-market. You’ve put the place on the market before you need to, specifically to drum up interest. In a case like this, if you take the statements at face value, you never would have even stumbled across this prospect. As I mentioned in the last section, it’s just not the best use of anyone's time to cater to every last prospect.
Be sure to schedule in groups or clusters. Group showings are a common practice in leasing. They work just fine -- but we do want to propose one step further. Schedule and show in clusters. It’s a little more work, but the outcome is great. ShowMojo makes Scheduling Clustered Showings easy, but it is also something you can do on your own.
You cluster showings by booking the first showing anywhere within the show window you published to the current tenant. Then you offer the next prospect the current time you already booked or an adjacent slot next to the booked time. The desired outcome of clustered showings is a double-booked schedule of showings at fifteen minute increments. Or, perhaps, every ten minutes for a smaller place. Or every twenty minutes for a larger place. If you have two people at the home doing showings, you could tripple-book and push the times even closer together.
The point of clustered showings is to complete mostly individual showings with little or no downtime in between the showings When you double-book showings every 15 minutes, no one actually shows on time, and as we all know some people don’t show at all.
When you get your timing right, the end result is a natural flow of individual showings that really maximizes your time at the property. And, if what I just described sounds too tough, you can always fall back on group showings.
One great thing about group or clustered showings is that you should never have to travel to the property for just one showing. This means you can save a lot of phone or email time by not heavily pre-screening prospects. Ask about only the most important things. Pets, or income, or whatever the big disqualifying criteria are.
By clustering showings, you can easily end up driving out for six or more showings. It’s fine that some prospects might not be fully qualified. In fact, having those prospects there could still be a benefit, since the place looks more in demand for the qualified prospects you are also showing it to.
Next, be sure to confirm with prospects prior to the showing. ShowMojo automatically confirms showings for you. But if you are not using ShowMojo, you can collect cell phone numbers when you schedule showings. Then text messaging becomes a quick-and-easy confirmation tool. You can send out confirmation (or reminder) text messages the afternoon before the next day’s showings.
To be clear, we're not proposing that you thumb out confirmation messages from your smartphone. There are multiple ways to do this much faster from a computer than a phone. If you have a Mac and iPhone, for example, you can use iMessage to quickly copy-and-paste confirmation messages out to everyone. Google Voice is another option. And Line2 is a messaging and voice platform we use at ShowMojo that would let you quickly and easily send all these messages from your computer.
Our last proposal here might be a little controversial, but it’s important enough to mention -- if there are not enough showings for a particular time, consider rescheduling the showings.
The point is to efficiently show occupied homes. If you have a good process humming along, and you are typically driving to a property with four or more showings on the schedule, what do you do when you look at the next day’s schedule and only see one or possibly two showings lined up at a property? We think you could consider rescheduling those one or two showings. The point here is to be efficient.
Driving to a home for only a showing or two is risking a no show. Just call them up and move them to a new showing window. Or, if you don’t really like that idea, then call them up and do a full screening before the showing. When it is only one or two people, now is the right time to make sure they are a good fit for the place, before you get in the car.
Whatever approach you take, you want to make sure your making the most of your time if you are headed out to do in-person showings.
3. Implement a Maximized Rent Ramp
This next step is optional and possibly not for everyone. But we also know how incredibly useful it can be.
No matter how much research we do, we never know for sure what a place will rent for, and there’s obvious dangers to guessing too high or too low. A rent ramp lets us test a higher rent while being ready to grab a lower rent if that’s all the market will give us.
The rent ramp is really just an upfront conversation and agreement with your owner. We’ll test the market at a higher rent and see what happens. But the goal is to avoid the significant cost of going vacant for a month. So each week or two we will look at showing activity and adjust the rent accordingly.
You do not have to lower the rent at fixed points or by a fixed amount. You can look back at your showing schedule to see what interest has been like, and adjust accordingly. Only a couple showings in the first two weeks is an obvious indication that rent needs to go down. A full showing schedule for two weeks, but no applications, could mean the best thing to do is hold out or lower rent just a bit.
There’s not too much overhead in this approach, if you’re already keeping a documented showing schedule, and if you — or a member of your staff — and the owner have the time to connect each week.
We are not saying this is easy. There is definitely some skill and finesse required in implementing a rent ramp strategy — especially when working with owners to make the rent adjustments. It will take real effort to initially implement this practice and make it run smoothly. But this is a technique that can pay huge dividends for your owner and your business.
And here’s the big point to not forget. You have the option to consider a rent ramp strategy — or anything else like it — because you are marketing and showing the home while it is still occupied. You now have extra time and slack that you would not otherwise have if you started the process with a vacant home.
4. Scale and Make Weekly Adjustments
What happens when a single showing agent — or property manager — has eight or more vacancies to contend with? Or when you have a team focused on leasing? How does all this work?
Our knee-jerk answer is to use ShowMojo and let ShowMojo handle the scaling for you. Nonetheless, our goal with this article is to assist everyone. So the remainder of this section is for individuals and teams who, for whatever reason, prefer to lease without the assistance of a leasing automation system.
First, regarding adjustments, obviously things are going to get busy. New listings come on the market and old listings go off the market. At some point you might not be able to maintain a weekly schedule for each listing that stays completely fixed for the duration of the leasing period.
But what you can do is only make adjustments on a weekly basis, and make them a week out. This even fits in with our one-week of pre-marketing. Because you pre-market each listing for a week — with no showing availability — that’s one week of warning for any show window adjustments to listings currently on the showing schedule.
Perhaps you need to move showing windows around so you show two homes in the same area at adjacent times, to minimize your drive. Adjusting an existing showing schedule for efficiencies like this just makes sense. The key here is that this should be done as a once-a-week activity, with a weekly warning to current tenants, so everyone has time to easily adjust.
An adjustment like that also means you might have to move some showings around. But, again, you are only concerned with moving showings more than a week out. There shouldn’t be that many showings to move. And showings more than a week out always have a bit of a question mark on them anyway. Will they really show? Will they find something before then? You never know.
If you like the rent ramp strategy that we just discussed, but are worried about the time commitment, then just move the conversation commitment to every two weeks. Or, depending on your market, you might be able to make it an every-three-week conversation. In the end, this might look like an agreed-to decision point instead of a ramp, but that’s still better than having no set expectation between you and your owners.
The really important thing here is that you act and plan in sustainable weekly cycles that you can predict and manage and complete. And you don’t need to touch each ongoing activity each week. You just want to know what activity or adjustment you need to take care of each week, and then make those specific decisions and changes that week. This frees you and your business from unpredictable and inefficient behaviors that come from changes made on a day-by-day or ad-hoc basis.
When multiple people are involved in showing the same listings, it might be time to split up the labor. The easiest split is between scheduling and showing. One person or set of individuals can take responsibility for scheduling. That includes building and maintaining the showing schedule, communicating with current tenants, and communicating with and scheduling all prospective renters. Then another person or group actually completes the showings.
Perhaps people might need to be moved or shared between the scheduling and showing groups -- because you just don’t need enough staff to have two completely separate groups. Perhaps you need everyone to show so you can fully accommodate weekend or evening showings. That’s fine. But recognizing and shaping the scheduling and showing work as two separate responsibilities — even when sharing people across the responsibility sets — will help you to more easily scale your business in the long run.
5. The Oddball Holdout and the Reasons Why
When we titled this article we were very careful to state “almost” zero vacancies. An occasional vacancy is going to happen. And you just need to focus on the silver lining and make the best of it.
One bright spot might be how much you were able to learn when showing the place while rent was still coming in.
Maybe the silver lining here is what the property owner has learned. Either about market rents -- or how ten-year old carpeting and bathroom fixtures from the seventies have simply lost their appeal.
Sometimes the current occupant is the issue. I have been burned on this one a few times. Roommates that are slobs. Cats combined with a particularly disgusting litter-box situation. If the issue is the current tenant, then the silver lining is that are the real marketing work has already been done and the place will rent quite quickly once the current tenant is out.
The Recap
We know we covered quite some distance in this article. Here's a couple major points to keep in mind as you head on with your day:
- Showing occupied homes is really your best shot at having almost no vacancies.
- Use at least a week of pre-marketing activity primes the pump for showings.
- Group and cluster showings for the least amount of effort and the most showings.
- Use the time you gain from showing occupied homes (and from pre-marketing) to implement a Maximized Rent Ramp.