Posted on Landlordology by Mike Kalis - CEO
There’s a good reason the movie industry makes you sit through 30 minutes of previews before the main attraction begins: premarketing works.Even if a product isn’t available yet, there’s no harm in getting your audience excited about what’s to come. In fact, it’s a smart strategy—even in the real estate industry. Many landlords assume they need to wait until properties are vacant before listing them. They think people browsing for rentals need a place to live right now, and if a home isn’t currently available, they won’t be interested. Sure, some people wait until the last minute to find new accommodations, but I believe more people start looking a month or so ahead of time. Posting a “coming soon” listing is the perfect way to attract these potential tenants and line up a bunch of showings for when your property hits the market.
The Perks of PremarketingPremarketing rentals gives landlords more leverage. Instead of saying,“The home has been listed for 45 days, but I swear there’s nothing wrong with it. If I chop $50 off your rent, will you please move in?” landlords can say, “It’s not quite ready yet, but I’ve already scheduled a bunch of tours for next week. I’m happy to add you to the list, but you’ll need to act fast!” During this window of a few weeks, you might field lots of inquires about your soon-to-be-vacant property. Because it isn’t available yet, prospective tenants might think you won’t be in desperation mode and bombard them with pushy sales speak. When our property management company premarkets a home, we typically line up at least 20 showings for the first two days, and almost always, one of those individuals becomes our tenant shortly thereafter. As a longtime practitioner of and firm believer in premarketing, I’ve created three pivotal strategies that will help you maximize this tactic:
1. Virtual stagingWhen consumers are looking for something online—whether it’s true love, an impulse buy, or a place to live—pictures play a big role in their decision-making process. So choose wisely when putting together your premarketing slide show, and invest some time into taking great photos. Don’t post photos of your current tenant’s tacky furniture. A beige La-Z-Boy won’t do your living room justice. But don’t post pictures of an empty house, either. Unstaged homes take 73 percent longer to fill. Consider hiring a virtual staging expert who can transform your empty home into a model residence featuring beautiful furniture, art, rugs, and other accessories. Virtual staging shows potential tenants what a home looks like when someone with an eye for style maximizes its potential, and that’s what you want people to see when you premarket your home.
2. Persuasive pricingDuring the premarketing phase, I’ve found that listing the property at roughly 5 percent below market value, which you can quickly calculate with Cozy’s Rent Estimate reports, evokes the most responses from prospective tenants. With more tenants to choose from, you can be more selective when setting your requirements for credit score, security deposit, and move-in date. If you put a low price on the property and entice a sizable crowd, don’t be surprised if prospective tenants bid up the price and ultimately give you more than you asked for. If that strategy sounds too risky, you could instead provide short-term incentives. For example, you could offer the lower-than-market value for the first three months of the contract rather than the entire 12 months. Wherever you post your listing, whether through Cozy or on Zillow, the lower price will be displayed, so in the description, explain the terms of the contract. In many cases, people sort listings by price, so having yours at $200 less than comparable houses can really drive traffic to your listing. You could also consider offering a free month of rent if someone signs a contract within the first few days the house is available. Don’t be afraid to think about pricing your property in a different way.
3. Creative copyA good listing matters. Too many landlords “feature dump” in their listings: “Granite countertops, hardwood floors, stainless steel appliances—too much to list!” This is redundant. Most renters probably already saw these things when they looked at your photos. Instead, follow the “FBE” approach:
Identify a feature, and tie it to a benefit and emotion.Granite countertops are a feature, the fact that they’re pretty is the benefit, and the idea that they’ll provide a backdrop for a lifetime of memories is an emotion you could evoke. Your copy could say, “Beautiful countertops you’ll love to gather around during the holidays to create lasting memories.” When structuring your listing, keep in mind that prospective tenants might not read past your first sentence, so make sure it features your unique selling proposition—whether that’s a premium neighborhood, a rent-free month, or flexibility on credit scores. Then, follow it up with five or so FBEs.
Try it for yourselfPremarketing works, but don’t take my word for it. Create a “coming soon” listing today to start building buzz around your property. If you keep the above tips in mind, you’ll find a tenant in no time.
President, Marketplace Homes