Renting out your Boston luxury condo

Boston Condo for Sale Search 2023

Rental and homeowner vacancy rates still near historic lows, Census data shows

The national rental and homeowner vacancy rates continue to hover near historic lows, reflecting the tight housing market, the latest Census Bureau data shows.

The national rental vacancy rate dropped to 5.6% in the second quarter of the year while the homeowner vacancy rate remained at 0.8%.

The national homeownership rate is at 65.8%, a slight increase from 65.4% in the first quarter of the year. The rate surpassed 69% in the mid-2000s, then dropped to about 63% about five years ago before starting a climb to its current rate.

Ownership rates remained highest among those 65 and older, at 79.3%. The rate is 75.1% for those aged 55-64; 70.6% for ages 45-54; 61.9% for 35-44 and 39.1% for those younger than 35.

The rate in the youngest group increased 1.3% year over year, the biggest change among the age groups.

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Boston luxury condo investors new to the real estate business think renting out properties will be an easy source of income. However, you may have difficulty making money on your investment if you manage the property incorrectly. If you own Boston luxury condo high rise condo in Seaport District or another Boston neighborhood in downtown, follow these five tips to make the most money possible when renting out a luxury condo unit.

1. Know the Value of Your Luxury Condo

One of the main reasons condo owners lose money is because they are advertising their rents at either too low or too high of a price. Renting your condo for much less than other condos in the area means you are missing the chance to make money. However, if the condo you own is in the Midtown Boston area and you rent it for far higher than other condos in Beacon Hill area, you may end up with a long vacancy between tenants that translates to lost money. Make sure you do your research and rent your condos for an amount comparable to other nearby condos.

2. Offer Extra Services for Additional Fees

Most Boston luxury condo tenants want a condo because it is more convenient, so many will be willing to pay extra for added conveniences. Things like coin-operated laundry machines or cleaning services can be an excellent way to supplement your rental income. This is particularly lucrative if you own multiple condos because you can get bulk deals with contractors and then charge the tenant more.

3. Be Cautious of Who You Rent To

A lot of property owners make the mistake of renting out their condo to the first person who expresses interest. However, it is important to do a thorough check of your potential tenant’s renting history before you sign a lease. If you get stuck with a nightmare tenant, you may end up losing money because you are stuck paying HOA fines for poor behavior, repairing damaged property, or even fighting court battles to evict tenants.

4. Encourage Tenants to Stay

Having to look for a new tenant can end up eating into your condo renting profit. During vacant months, you do not make any rent. You also end up having to pay to advertise the condo in downtown Boston, repair any damage, and stage the condo to make it appeal to new renters. To minimize turnover, make sure you promptly reply to the concerns your tenants have and repair any issues quickly. Consider offering other incentives like free repainting or added amenities to keep reliable tenants.

5. Be Firm About Late Fees

Everyone wants to be liked, but you need to keep in mind you are a landlord, not a friend. Stress the importance of tenants paying on time, and be firm about collecting previously agreed upon late fees if the tenants are late. Otherwise, you may be losing money just because you want to seem nice.