Beyond "Days on Market": True KPIs for Investment Properties

Don't Be Fooled by "Days on Market": The Real KPI for Your Investment Property

As a property investor, you're constantly looking for ways to maximize returns and minimize losses. When it comes to leasing your property, you've probably heard real estate agencies boast about their low "days on market" (DOM) figures. But what if we told you that this widely promoted metric might be misleading you?

In a recent recording for a blog post, we delved into the strategic processes required to minimize vacancy and why timely advertising and home opens are crucial. Let's uncover why focusing on "days on market" can be a costly mistake and what truly matters for your bottom line.

The Two Scenarios of Advertising Your Rental Property

When advertising a property for rent, there are typically two main scenarios :

1. Vacant Property: This is the simplest scenario. The property is empty, clean, well-presented, and readily available for inspections at any time . While seemingly ideal, waiting until a property is fully vacant before advertising can lead to extended periods of lost rent.

2. Occupied Property: This involves advertising the property while current tenants are still residing there, but are soon to move out . This scenario requires careful coordination with outgoing tenants for home opens and presentation.

   
   

The Deception of "Days on Market"

Many real estate agencies promote "days on market" as a key performance indicator (KPI) for how quickly they can lease a property . However, this metric simply measures the number of days a property has been advertised online until the advert is removed . It tells you nothing about the actual period your property sits vacant, costing you rent.

Consider this: if an agency only starts advertising after your outgoing tenants have moved out, the property has been cleaned, and all inspections are complete, your property could already be vacant for a week or more before it even hits the market . If their "days on market" is then seven days, you've already lost two weeks of rent! Add to that the time it takes for new tenants to sign leases, pay bonds, give notice to their current agencies (often 30 days), and plan their move, and you're looking at significant hidden costs.

The True Measure: Minimizing Vacancy Days

The real measure of performance for a property owner is the number of days the property is vacant between tenancies. This is the metric that directly impacts your rental income.

At Box Property Management, our focus is squarely on minimizing these vacancy days. We achieve this by starting the advertising process before current tenants move out . This proactive approach ensures continuous income for you, the owner.

The Box Property Management Strategy for Seamless Transitions

1. Early Advertising: We begin advertising your property for rent while it's still occupied, ensuring market exposure and potential applicants are lined up before the property becomes vacant.

2. Building Trust with Outgoing Tenants: We work closely with outgoing tenants, building rapport to ensure the property is presented in a clean and professional state for home opens.

3. Strategic Home Opens: We schedule home opens at times most convenient for prospective tenants, maximizing attendance and quality applications. This includes weekday evenings (4:30 PM - 5:30 PM) and Saturday mornings (around 10-11 AM), which have proven to be highly successful.

4. Rapid Application Processing: Our team dedicates itself to quickly reviewing all applications, including following up on partially completed ones, to secure quality tenants swiftly . This speed is critical, as many tenants apply for multiple properties and will accept the first approval they receive.

   
   

Important Note: Verifying Advertising Lead Times

During our discussion, it was noted that there are legal compliance laws regarding how early a property can be advertised for rent before current tenants move out, with a mention of "currently 21 days" . It is crucial to verify the current policies with the Department of Mines, Industry Regulation and Safety (DMIRS) to ensure full compliance and provide the most accurate information regarding the legal notice period for pre-vacate advertising. This ensures that while we aim for early market exposure, we always operate within legal boundaries.

The Bottom Line

Don't let misleading KPIs obscure your investment goals. The true measure of a property manager's success lies in minimizing your property's vacancy days, not just its "days on market." By focusing on proactive advertising, tenant cooperation, strategic showings, and swift application processing, we aim to secure quality tenants and ensure minimal loss of rent for you.