The past two weeks, we have been under renovation for a new rehab house that we are listing for rent. It is in a super cool neighborhood near great food, shopping and access to highways. My partner on the deal and I have worked really hard on this one in developing the processes of how we are assessing the property, plugging its numbers into our spreadsheets.
As a matter of fact, we are pretty good at spreadsheeting something to death. 🙂
Seriously, though, that’s great. If it makes sense on paper, there is a good chance the deal will work. At the same time, we have to think through ALL of the factors that help a property. Proximity within the city or locale, as well as access to services, shopping and the things we do for our normal, daily life. You also want to have a good understanding of the demographic of that area and the types of finishes people are used to.
Something that I was really curious about was how strong a renter’s desire for a property would be with only an IDEA of what the house was — and no other real, tangible pictures or anything else provided.
I decided to post the house we purchased for rent, even before any work had been completed. (There is a caveat to this — wait for it!) So we closed on the house, and a few days later, I wrote up this awesome post about the incredible hardwoods, the brand new kitchen, the granite countertops, the plush carpet and the Pottery Barn colors. You know… the whole deal.
Remember, we didn’t post a single pictures. For reference, it was a 2/1 with a 1-car garage, den, on a slab. We are asking $1,300 monthly.
It’s a great mix of families, young professionals and college students, and there is a lot of activity both in the residential and commercial real estate areas. There are local restaurants around, within walking distance. There are good schools and just a cool vibe for the neighborhood — tree-lined streets with sidewalks, churches, and grocery stores. It’s a great Midwest feel in the heart of the metro area.
The Initial Reaction
I placed a sign in the yard first. I had everything written in the post. Using Postlets is awesome, easy and goes all over the interwebs — for free. But I wanted to first see what kind of action we would get on the sign. And then post the house online.
Within 15-20 minutes, I had my first call. And within the first two days, I had somewhere around 10.
Now, not all of them were great leads. Some were investors looking to buy it (so sorry, we got there first), and some people were out of their price range for what they were looking for.
That’s okay with me.
The bottom line, first test was a pass.
Then I posted the link online for rental, with just the writeup about it, along with the rent and deposit amount. And within a day or two, the flood gates opened up, and we have had dozens and dozens of interested parties.
Open House – HGTV Style
On a lot of our rental houses, we have started to do open houses instead of individual appointments. It’s worked pretty well, although I still go back and forth on it. In our lower price point houses (say, $750-$950 monthly), this has worked amazingly well. We continue to have a huge demand for rental houses here, much more than what we have the doors for (hence, we continue to add more to our portfolio, as well as with our TK partner).
I decided to host the open house with the house under renovation. At first idea, I thought it would be a cool way for people to experience a house literally under renovation, hand them a glass of wine, chat them through the space, and then walk them through as though they had the camera crew behind them and I was the host.
Here is where the incredible wood floor will be, and here is where the granite and awesome backsplash will be. Here is where you will live your life! In this crappy, dirty, smelly, mid-construction house.
It didn’t exactly have the desired effect I wanted. The first couple into the house, well, she was wearing a nice summer dress, and you could tell she was thinking, eek, I could get dirty. And there was definitely the deer-in-the-headlights look once they were actually into the front door and saw what was going on.
My assistant and I spoke with them both for a while, and they were kind. But you could tell they just didn’t know what to do with everything. It was a mess in there. And it’s not their fault they couldn’t see past it.
Although we did have other people into the property, the desired effect for people to see the “what could be” didn’t work very well. We won’t be holding any more open houses until our property is further along, at least within a week or so of finishing. It was a good idea, and I am not disappointed I tried to do it.
Front now on, although I CAN imagine what the house will look like in almost any condition, most people cannot. And we want to put our best foot forward as we put our properties online and look for the best renters.
What are your best practices in leasing properties, and what ways have you found to rent them the fastest and with the best use of time and energy?
Let me know with a comment!