First Rental - Not getting rented since April 2022

Memphis, Tennessee
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First Rental - Not getting rented since April 2022

Saurabh Kukreja
New to Real Estate · MA · Member since 2020 · 19 posts · 3 votes

Hello Folks, I closed my first rental property in Mid April in Zip 38141and since then Have been trying to market the home for rent with a PM company but its June Now and no luck so faar.

My PM keeps asking me to lower down the price and now I am a point where I cant lower it down anymore. 

Any advice on how to handle this, please?

Should I try a new PM?

Should I furnish the home with appliances ( right now it does not have anything other than cooktop )

I have seen the video and it does not look too bad which PM also mentioned that home is rent ready!

Thank you

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Brad S.
Investor · Pasadena, CA · Member since 2017 · 613 posts · 523 votes
4y
Quote from @Saurabh Kukreja:

Hello Folks, I closed my first rental property in Mid April in Zip 38141and since then Have been trying to market the home for rent with a PM company but its June Now and no luck so faar.

My PM keeps asking me to lower down the price and now I am a point where I cant lower it down anymore. 

Any advice on how to handle this, please?

Should I try a new PM?

Should I furnish the home with appliances ( right now it does not have anything other than cooktop )

I have seen the video and it does not look too bad which PM also mentioned that home is rent ready!

Thank you

 Ok, could be due to many different issues. Your job is to figure it out which one/s and address them.

* Ineffective property management - not properly marketing, not available for showings, not responsive to prospective tenants, etc. - SOLUTION-find new PM

* Asking price too high - possibly over market rent - SOLUTION - research rental comps and adjust asking price accordingly

* Your property may have less appeal than competing properties, this could be due to lack of supplied appliances, bed/bath count differences, gla size,  yard size, location, quality, condition, and many other characteristics. - SOLUTION - once again, check out the competing available and rented properties, also call competing property management companies in the area, they have the best data and view of the rental market. Tell them you are shopping for new management and ask their opinion. And if the factors are "curable," then cure them, if incurable, you can either hang on for the ride till they get curable (if that is possible), or you can dispose of the property, hopefully not at a loss.

Ok, that's all I got for now.

By the way, this should all have been done BEFORE you bought the property. I mean that as a lesson, not a criticism. But, maybe you did do the research as thoroughly as you could. In that case, that is part of the risk of REI and why the rewards can be great as well. Good luck!

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  • Triet Nguyen
    Member since 2022 · 1 post · 2 votes
    4y

    Typically if you try to rent out a place, I would expect at least the basics. A fridge, stove, washing machine etc. Alot of renters don't want to buy that just for a rented home. Also based on your market, maybe your prices are high? We don't have enough info to judge that

    2Reply
  • Joel Case
    Rental Property Investor · Ocean Springs, MS · Member since 2022 · 349 posts · 301 votes
    4y

    Definitely outfit it with appliances. I would head to Facebook Marketplace and get good working used units. 

    2Reply
  • Lillie HernandezPro Member
    Realtor · jacksonville, FL · Member since 2017 · 303 posts · 52 votes
    4y

    It depends on the city and how its market doing. I am guessing your rental is probably listed too high but you can always compare rentals in the area and see how much those are renting out for and if appliances are included or not. I would not fully furnish it unless youre advertising as a fully furnished rental unit or airbnb etc but the main appliances such as fridge and stove are typically expected in rentals unless of course the leases state otherwise. Hope that helps! 

    0Reply
  • Troy Green
    Investor · Austin, TX · Member since 2022 · 16 posts · 12 votes
    4y
    I agree with the folks above either your property is listed too high for the amenities provided or you may need to look for a different PM company if they aren't getting the job done. Sometimes you'll need to work your way around a few different PMs until you find one who is on the same page as you are. I would recommend adding at least a fridge; if you dont want to provide a washer dryer there are companies out there that the tenant can rent them from at a low monthly fee. This will also make your life easier in case they break down as the rental companies are responsible for all repairs. 
    0Reply
  • Lileth Nelson
    Member since 2022 · 10 posts · 3 votes
    4y

    Hi First time rental, yes, definitely all appliances for your kitchen should be in place. It depend on your market
    whether or not you should provide washer and dryer. 

    2Reply
  • Brad S.
    Investor · Pasadena, CA · Member since 2017 · 613 posts · 523 votes
    4y
    Quote from @Saurabh Kukreja:

    Hello Folks, I closed my first rental property in Mid April in Zip 38141and since then Have been trying to market the home for rent with a PM company but its June Now and no luck so faar.

    My PM keeps asking me to lower down the price and now I am a point where I cant lower it down anymore. 

    Any advice on how to handle this, please?

    Should I try a new PM?

    Should I furnish the home with appliances ( right now it does not have anything other than cooktop )

    I have seen the video and it does not look too bad which PM also mentioned that home is rent ready!

    Thank you

     Ok, could be due to many different issues. Your job is to figure it out which one/s and address them.

    * Ineffective property management - not properly marketing, not available for showings, not responsive to prospective tenants, etc. - SOLUTION-find new PM

    * Asking price too high - possibly over market rent - SOLUTION - research rental comps and adjust asking price accordingly

    * Your property may have less appeal than competing properties, this could be due to lack of supplied appliances, bed/bath count differences, gla size,  yard size, location, quality, condition, and many other characteristics. - SOLUTION - once again, check out the competing available and rented properties, also call competing property management companies in the area, they have the best data and view of the rental market. Tell them you are shopping for new management and ask their opinion. And if the factors are "curable," then cure them, if incurable, you can either hang on for the ride till they get curable (if that is possible), or you can dispose of the property, hopefully not at a loss.

    Ok, that's all I got for now.

    By the way, this should all have been done BEFORE you bought the property. I mean that as a lesson, not a criticism. But, maybe you did do the research as thoroughly as you could. In that case, that is part of the risk of REI and why the rewards can be great as well. Good luck!

    3Reply
  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    4y

    @Saurabh Kukreja
    You should include appliances. I have heard of some tenants supplying a fridge, which is pretty rare in Columbus, but for a tenant to supply a stove is very uncommon. Also, I would check what comps are renting for again. It's very likely you are looking for something over what the rental market supports. 

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    0Reply
  • Joshua MessingerBusiness Member
    Property Manager · Poconos, PA · Member since 2020 · 443 posts · 264 votes
    4y

    Hey @Saurabh Kukreja! 

    I would at least provide a washer/dryer and a fridge. Nowadays it is harder and harder to rent out entirely naked units to anyone due to them not wanting to do the work and spend the money to buy the appliances/furnishings. Also, you have to think about what they're thinking when their lease ends - they will have to just move everything right out which is extremely inconvenient for them.  Otherwise, I don't believe you should switch PM companies as they won't really be able to change anything since it is an entirely empty unit, for now, I would focus on getting those appliances. A good place to find cheap appliances is the FB marketplace. Just stay active on there and you will eventually find some good deals on some solid appliances. 

    If you have anymore questions at all please don't hesitate to reach out! 

    Live Free,

    Josh

    [email protected]484-986-5012
    0Reply
  • Jasmine H.
    Rental Property Investor · Houston, TX · Member since 2014 · 139 posts · 140 votes
    4y

    @Saurabh Kukreja have you checked out the listing your PM posted? It should pop up on zillow. Look and see if the listing and pictures are good.

    Did you have any walk throughs, any applications, or feedback from potential tenants?

    0Reply
  • Wendy ThurstPro Member
    Nashville, TN (nashville tn) · Member since 2020 · 49 posts · 28 votes
    4y

    @Saurabh Kukreja. If your rental is near hospitals and in a safe community I suggest furnishing it and listing on FF for traveling nurses. 3 month contracts typically and you make your furnishing money back right away.

    Hang in there and best of luck!

    2Reply
  • Curtis Mears
    Property Manager · Raleigh, NC · Member since 2014 · 729 posts · 596 votes
    4y

    @Saurabh Kukreja

    I would definitely provide fridge, oven, microwave and dishwasher, but not clothes washer and dryer. Also, personally, I would rent the place without the pm. Unless the property is out of state, you are giving money away.

    3Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    4y

    I am always concerned when I see new investors start remote and rely on a PM they don't know - sounds like you invested out of State and have not seen the property? I know they tell you online that remote investing works, super easy, just look at my success etc - but one of the main benefits of REI is that you have control! Pictures can be deceiving. I helped a guy once with a property here in Milwaukee, basically same story and when I went there it was pretty obvious why nobody would want to live there. The place was just disgusting!

    So before you do anything hop on a plane and go visit your rental in person! And while you are there check out your competition!

    We have a housing shortage and everything rents in 1 or 2 days - so there is definitely something wrong! This is not rocket science! If your PM does not know what it takes to rent the property then fire them today. If your PM is telling you what is wrong and you just don't want to do that, well.. can't fire yourself I guess.

    2Reply
  • Osazee J Osagie
    Investor · Potomac Maryland · Member since 2020 · 81 posts · 46 votes
    4y

    If you live near the property, manage it yourself and do this for your 1st 10 rentals. It will help you to understand the business . Also, that way you will be able to answer the very important questions raised by the good folks above.

    If you do not live near the property, definitely fire your pm. A good pm will not accept your property until it is " rentable" and if they cannot rent it all this while even though they certified it "rentable", they are bad.

    Another thought is that if your property is not renting quick consider converting it to AIR BNB, at least that may offset some of your cost

    0Reply
  • Tim Herman
    Member since 2018 · 2k+ posts · 1k+ votes
    4y

    @Saurabh Kukreja Did you ask the PM what the market price of your rental is? Most tenants don't have the ability to pay a security deposit, first months rent and then go out and buy new appliances. They can buy a house with that much money out of pocket. You said you can't lower the price any more but that is not true. If it takes another month to rent and your rent is $1500 per month. You will have lost $4500. If you reduce the rent by $300 per month you will only be out of pocket $3600. Bump up the rent on lease renewal.

    1Reply
  • Zack Demopoulos
    New to Real Estate · Randolph, NJ · Member since 2022 · 5 posts · 0 votes
    4y

    @Saurabh Kukreja sorry to hear about this and as a newbie here looking to buy a rental, your post (and subsequent response) were extremely helpful.

    Call me crazy but for what a PM charges (don't go with the cheapest...you get what you pay for) I am very surprised that they have not shared many if not all of the responses given here.  I plan to "drill" 3-4 potential PM's before I even purchase a property and have them involved in the process of helping me look at actual rent analytics in the area.  

    Any other tips out there about approaching PM's?  Thank you!

    0Reply
  • Carlos M.
    Investor · Lancaster, PA · Member since 2016 · 94 posts · 356 votes
    4y

    @Saurabh Kukreja

    The market dictates what your unit can rent for. You can’t set the rents based on what will work for you. You need to find a deal that works with what the market will allow. I’m not sure what appliances the tenants are responsible for in your unit , fridge , dishwasher, laundry ?? But again, the market will dictate what is acceptable or standard in regards to appliances. I stopped asking tenants to provide any appliances. In our personal experience, the tenants damage the walls and floors past the point of any savings I would have realized. Most tenants don’t have a way to move appliances either. If your phone isn’t ringing off the hook with possible applicants , and the unit didn’t rent in two days something is drastically wrong.

    0Reply
  • Frank Greg
    Lender · rate.bid · Member since 2022 · 324 posts · 62 votes
    4y
    @Saurabh Kukreja

    Hello Folks, I closed my first rental property in Mid April in Zip 38141and since then Have been trying to market the home for rent with a PM company but its June Now and no luck so faar...


     Was this a cash buy or any financing, pending refinancing involved?

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    4y

    @Saurabh Kukreja building on what @Brad S. posted:

    1) How does the ad & pics compare to the competition?
    - No one wants to spend $500 on pics, but you also don't want amateur looking pics either.
    - How is the ad written? How does it highlight the property's features?

    2) How did your PMC decide the rent amount?
    - What comparables from the area did they send you?
    - How did they explain it all to you?

    3) Where are they advertising your property for rent?
    - Hopefully on Zillow!
    - Where else?

    4) What feedback are they giving you on marketing activity?
    - Webviews?
    - Calls?
    - Showings scheduled and Showings completed?
    - Number of applications?
    - Reasons applications didn't work out?

    5) Other options:
    - Have they done a Zillow 3-D tour?
    - Why not put in ad that applainces are available for $x more monthly rent?

    Unfortunately, NOT every property rents in 2-3 days as @Marcus Auerbach claims:(

    Our team monitors how long our vacant rental properties have been marketed and we address everything we listed above with our landlord clients. The longer a property is vacant, the more data we provide to justify lowering the rental price - or we find another option to improve the marketing.

    [email protected]248-209-6824
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  • Jared HottleBusiness Member
    Real Estate Agent · Cedar falls IA Waterloo, IA · Member since 2020 · 902 posts · 549 votes
    4y

    I would agree definitely need appliances and see how they have been advertising. If not on Facebook marketplace or in groups I would definitely have them do that or ask if you can do that and have it directed to them.

    [email protected]319-288-5382
    Jared Hottle Real Estate59 Reviews
    WebsiteView Page
    1Reply
  • Jonathan R McLaughlin
    Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    4y

    @Saurabh Kukreja is it even legal to rent this? It wouldn’t be legal in ma without a fridge and stove.

    This is kind of mind boggling…the property is not rent ready if it doesn’t have the basics

    0Reply
  • Michael Deering
    Rental Property Investor · Lehigh Valley, PA · Member since 2017 · 200 posts · 191 votes
    4y

    Ask your PM for three metrics

    # of inquires

    # of applications submitted

    # of showings.

    I understand our markets are different but here are the metrics for a Class D property I recently rented in three days

    288 Inquires

    18 Applications

    6 showings

    1 security deposit in my account within 96hrs of posting my listing

    3Reply
  • Miranda Holland
    Lender · Macon, GA · Member since 2015 · 191 posts · 59 votes
    4y

    @Saurabh Kukreja

    yeah you gotta remember, renters are checking out several properties when they're shopping for the right one. It'll be hard to compete in any USA market without a fridge and full stove at least. I'm surprised the property manager took this on without letting you know how hard it would be to rent without basic appliances.

    0Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    4y

    My view is appliances are market specific. In my market providing a washer/dryer is rare.  Providing stove, oven, and refrigerator is common.  However, 10 years ago providing a refrigerator was not as common.  Make sure you are providing the appliances that are expected for your market.

    I do extensive rent survey in my markets at least once a year and usually more often.  The first part of that survey is seeing what Rentometer has as average and median rent and to see what Zillow lists as the expected rent.  These will be rough estimates as they do not take into account amenities or condition, but it provides a good start that only takes a couple of minutes.  How does your rent point compare to the Rentometer rent?  How does it compare to the Zillow rent?

    You indicate that you cannot lower rent further, however if your rent is too high your obvious choices are extended vacancy or lower the rent.  Note that an extended vacancy can consume many months of lowered rent.  For example, $1200 rent implies one month extra vacancy is equivalent to a $100/month rent reduction at a one year occupancy.  2 months vacancy equates to $200/month rent reduction.  Note this is for a low rent of $1200.  At a rent point of $3600/month (below the average 3 BR rent in my market), one month vacancy equates to a $300/month rent reduction for the 1 year occupancy.  Of course we all hope our good tenants stay a lot longer than a year but I hope you get the point.

    If the PM is not providing you any indications on what the issue is finding a tenant then they are incapable of doing their job and have to be let go.  

    Good luck

    0Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    4y

     Maybe your market is slower? 

    We turn Zillow posts off after 24-48 hours, because we usually have 100+ inquiries and it takes a week to work trough that, schedule showings and run background checks. Full disclosure: our homes are in above average condition and I know what fair market rent is, so we don't have to try and then reduce. In the end it comes down to two things, price and condition. If it does not produce an average amount of inquires within the first week, you know that one of those two is off. 

    Also, good pictures are the most important thing, half of the applicants don't even reads the text. Going rate for professional real estate photography is about $120 here and that's well worth it. If you get charged $500 for pics, I would shop that around!

    1Reply
  • Terez Jones
    Memphis, TN · Member since 2022 · 40 posts · 17 votes
    4y

    Hi Saurabh...not having you home rented and loosing that potential rental income can be tough.  I am in the Memphis market and I would be happy to help you with this property and grow your portfolio.  Partnering with the right PM company is key!  At Evernest, we have a 21 day lease guarantee - this helps to give our investors peace of mind.  I would be happy to answer any questions that you may have.  Let me know!

    1Reply
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