Can not find tenants

Property Manager · Houston, TX · Member since 2014 · 128 posts · 24 votes

Hey all,

I have listed a property in Katy, TX. It's been on the market for about one month. I believe the price is good according to CMA.

It is a two story, with all bedrooms upstairs, some people say they need at least one bedroom down. It is in a good condition, 2006, 4 bedrooms, 2 and half bath.

Making it short, I don't know what is wrong. Please advise how could I find the problems on my side. The rent was 1350 and we changed it to 1300. But it didn't solve the problem.

So what else should I do.

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Mark Del Grosso

Rental Property Investor · Lockport, NY · Member since 2014 · 119 posts · 109 votes

11y

Hang tight. This is the worst months to rent. January is better that December and February is a little better that January IMO.

Don't make the mistake of renting to just anyone. You will regret it.

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Karen MargraveBusiness Member
Moderator
Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
11y
Maybe you should list it with a local property management company, that does a lot of advertising. Have you had any interest at all? It usually comes down to price and location. Good luck.
3 Reply
Mark Del Grosso
Rental Property Investor · Lockport, NY · Member since 2014 · 119 posts · 109 votes
11y
Hang tight. This is the worst months to rent. January is better that December and February is a little better that January IMO.
Don't make the mistake of renting to just anyone. You will regret it.

9 Reply
Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
11y
Do you own this property OR are you trying to rent it for a seller??
Was this intended to be a resale or has this always been a rental and you had the tenant leave at this time of year??
The reason I ask these questions is you never have a lease end around the holidays. You are just asking for vacancy problems. Most families do not want to move for the holidays. So with Thanksgiving, Christmas, and New Years you almost take out 3 months of time for many who want to rent.
I have seen this happen time and time again where if the property goes vacant November then a new tenant doesn't go in until February or March! At least it's that way around here.
When you say CMA was good and you moved from 1,350 to 1,300 are you looking at RECENT lease rates?? In our MLS it will show rent rates that are asked for and then what properties actually leased for and any rent credits. You will have to compare that with the time of year the lease up occurred.
For example if the last rental leased up for 1,350 3 months ago and had a downstairs bedroom but nothing is leasing up now you will have to discount much more than 50 to find a quality tenant. The tenants moving this time of year have to move so there are less of them but likely a ton of rentals on the market.
Usually you might have to offer half of first months rent or one month free rent. You can put on the back end in month 12 for example. This way if they do not make it to term or they do not make all payments on time then they do not get the credit. It's their job to read the lease and understand what they sign and agree to. Now if you are the owner as well as the leasing agent you need to fully disclose this to them that you are licensed.
By checking the MLS you will see absorption rates based on what time of year. So maybe 3 months ago historically rentals were signed at a clip of 10 a month per 50 rentals on the market. Now this time of year history shows 80 on the market and only 5 signed for a slower absorption ( lease up rate ). You will also need to compare rent ask rate number to rent lease up percentage. So if rents asked are 1,000 and rents are 900 then that is a 90% list to actual rent ratio.
These are just ideas and I know nothing of tenant landlord laws for your state and there is no legal advice given.
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Neda Navidnia
OP
Property Manager · Houston, TX · Member since 2014 · 128 posts · 24 votes
11y
Originally posted by @Karen Margrave:

Maybe you should list it with a local property management company, that does a lot of advertising. Have you had any interest at all? It usually comes down to price and location. Good luck.
Thank you for your respond, actually I work with a brand new property management company. We haven't done any local advertisement yet. But it is a good idea.
1 Reply
Neda Navidnia
OP
Property Manager · Houston, TX · Member since 2014 · 128 posts · 24 votes
11y
Originally posted by @Mark Del Grosso:

Hang tight. This is the worst months to rent. January is better that December and February is a little better that January IMO.
Don't make the mistake of renting to just anyone. You will regret it.

I know, you are right. But what about all of these people who call and send email, asking for more information? Some are saying they want to move ASAP.
0 Reply
Aly W.
Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
11y
We just rented a condo in FL and the tenants are moving in Dec. 15. In that market, there are a lot of relo tenants, so the end of the year isn't much different than any other time, plus the weather doesn't discourage people from moving in the winter. We've rented several units in November and December.
That said, it took over 2 months to find these tenants and we finally had our realtor list it on the MLS after having it on Craigslist, Rentlinx, HotPads, etc. I had overestimated the rent this unit would get, based on feedback from several people living in the complex. I should have used www.rentometer.com right away. I would say I wasted a good month lowering the rent incrementally before getting steady traffic to see it. The second month had quite a few viewings and 3 applications that were not approved for various reasons, but were all for the same amount of rent our approved tenants will be paying. Rentometer.com was accurate.
If you're getting a lot of interest, but no applications, the asking rent is probably close to where it should be and you may just have to wait it out, or offer the incentives Joel mentioned. When you're not getting phone calls, the rent is definitely too high compared to similar properties.
2 Reply
Neda Navidnia
OP
Property Manager · Houston, TX · Member since 2014 · 128 posts · 24 votes
11y
Originally posted by @Joel Owens:

Do you own this property OR are you trying to rent it for a seller??
Was this intended to be a resale or has this always been a rental and you had the tenant leave at this time of year??
The reason I ask these questions is you never have a lease end around the holidays. You are just asking for vacancy problems. Most families do not want to move for the holidays. So with Thanksgiving, Christmas, and New Years you almost take out 3 months of time for many who want to rent.
I have seen this happen time and time again where if the property goes vacant November then a new tenant doesn't go in until February or March! At least it's that way around here.
When you say CMA was good and you moved from 1,350 to 1,300 are you looking at RECENT lease rates?? In our MLS it will show rent rates that are asked for and then what properties actually leased for and any rent credits. You will have to compare that with the time of year the lease up occurred.
For example if the last rental leased up for 1,350 3 months ago and had a downstairs bedroom but nothing is leasing up now you will have to discount much more than 50 to find a quality tenant. The tenants moving this time of year have to move so there are less of them but likely a ton of rentals on the market.
Usually you might have to offer half of first months rent or one month free rent. You can put on the back end in month 12 for example. This way if they do not make it to term or they do not make all payments on time then they do not get the credit. It's their job to read the lease and understand what they sign and agree to. Now if you are the owner as well as the leasing agent you need to fully disclose this to them that you are licensed.
By checking the MLS you will see absorption rates based on what time of year. So maybe 3 months ago historically rentals were signed at a clip of 10 a month per 50 rentals on the market. Now this time of year history shows 80 on the market and only 5 signed for a slower absorption ( lease up rate ). You will also need to compare rent ask rate number to rent lease up percentage. So if rents asked are 1,000 and rents are 900 then that is a 90% list to actual rent ratio.
These are just ideas and I know nothing of tenant landlord laws for your state and there is no legal advice given.
Thank you for all of these information and useful ideas.
I am the listing agent working with a brand new property management company. I had 3 listings at the same time, 2 in the same neighborhood, the other one was just few minutes far from this one and it took me 2 weeks to find the tenant. 1 story, 3 bedrooms, 1300 per month.
The new owner just got it ready for the market, I don't know about its history. But it didn't take him so long. So the property has been maintained recently.
I know this is not a good time of the year for us, and I also think when I find tenants, next year I would have the same problem if they don't renew the lease. But my problem is seeing a lot of people looking for a place but for some reasons this one doesn't work for them.
I was thinking maybe there is something wrong with my presentation.
I would get the info that you mentioned, they will help a lot.
0 Reply
Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
11y
"the other one was just few minutes far from this one and it took me 2 weeks to find the tenant. 1 story, 3 bedrooms, 1300 per month."
Depending on density of the area and demographics with also schools the location and property comparison are MILES apart in valuation.
1 story ranch style is good for people with issues climbing stairs. You also have to compare view, amenities, lot size, cul-de-sac or main road etc.
These things might sound small but when you add them up there is a big difference and rent value factor from the one you rented quickly to the one you are having trouble renting now.
In Texas with a few minutes drive the median income of an area can go from 120,000 with the national average being around 54,000 to say 75,000 or so. One is a great area and the other is a good area so rents vary.
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1 Reply
Dawn AnastasiPro Member
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
11y
One little trick to try is that instead of listing it at $1300, try $1295. It "looks" smaller but it's really not that much smaller an amount. Some people even do rents ending in "99" such as $1299.
Make sure you have LOTS of pictures. Also advertise the heck out of it. I do Craigslist and Postlets, and sometimes distribute flyers to existing tenants.
I just had 2 one-bedrooms come up for rent and got them both rented fairly quickly. And this is in WI where it's been 11 degrees. So the weather has some impact, but if you have a quality product at a good price, people will come.
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7 Reply
Brandon M.
Agent / Investor · Clearwater, FL · Member since 2014 · 573 posts · 281 votes
11y
To follow up on what Joel said, to rectify the situation of the lease ending in Nov/Dec maybe look to get an 18 month lease signed when you do find a tenant, that way you can have the lease end in the summer months when more people are moving.
4 Reply
Mark Del Grosso
Rental Property Investor · Lockport, NY · Member since 2014 · 119 posts · 109 votes
11y
Originally posted by @Neda Navidnia:

Originally posted by @Mark Del Grosso:
Hang tight. This is the worst months to rent. January is better that December and February is a little better that January IMO.
Don't make the mistake of renting to just anyone. You will regret it.

I know, you are right. But what about all of these people who call and send email, asking for more information? Some are saying they want to move ASAP.
If you know your rent is comparable then patience is due.
In the over 25 years of being a landlord the one skill that is often overlooked is patience.
And remember " the next email may be the one". By all means don't do the math at how much you are losing by letting it sit empty. RE is a long term investment.
p.s. I have never had as many vacancies as I have right now, so I get it.
6 Reply
Neda Navidnia
OP
Property Manager · Houston, TX · Member since 2014 · 128 posts · 24 votes
11y
Originally posted by @Brandon M.:

To follow up on what Joel said, to rectify the situation of the lease ending in Nov/Dec maybe look to get an 18 month lease signed when you do find a tenant, that way you can have the lease end in the summer months when more people are moving.
This is the best solution, I don't want to have the same headache each year. :)
1 Reply
Aly W.
Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
11y
Originally posted by @Dawn Anastasi:

One little trick to try is that instead of listing it at $1300, try $1295. It "looks" smaller but it's really not that much smaller an amount. Some people even do rents ending in "99" such as $1299.
Make sure you have LOTS of pictures. Also advertise the heck out of it. I do Craigslist and Postlets, and sometimes distribute flyers to existing tenants.
I've done that price trick, and it works. Postlets is great, it syndicates all over the place, including Realtor.com, strangely enough. Use a professional photographer for the images...dark, blurry images are not appealing.
3 Reply
Aly W.
Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
11y
So true...in all the years of renting to tenants, it's still a time of anxiety when a vacancy goes longer than a month. But the wait for the right tenant is always worth it. I feel your pain. We just filled a property that was our longest vacancy ever.
2 Reply
Aly W.
Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
11y
Originally posted by @Neda Navidnia:

Hang tight. This is the worst months to rent. January is better that December and February is a little better that January IMO.
Don't make the mistake of renting to just anyone. You will regret it.

I know, you are right. But what about all of these people who call and send email, asking for more information? Some are saying they want to move ASAP.
Some of the free rental sites don't allow a tenant to ask any specific questions; you'll just get a generic email asking for more info. I send test messages to myself through those sites just to see what the tenant will see.
But any tenant who says they need to move ASAP is usually a red flag. Don't let their desperation sway you.
0 Reply
Neda Navidnia
OP
Property Manager · Houston, TX · Member since 2014 · 128 posts · 24 votes
11y
Originally posted by @Dawn Anastasi:

One little trick to try is that instead of listing it at $1300, try $1295. It "looks" smaller but it's really not that much smaller an amount. Some people even do rents ending in "99" such as $1299.
Make sure you have LOTS of pictures. Also advertise the heck out of it. I do Craigslist and Postlets, and sometimes distribute flyers to existing tenants.
I just had 2 one-bedrooms come up for rent and got them both rented fairly quickly. And this is in WI where it's been 11 degrees. So the weather has some impact, but if you have a quality product at a good price, people will come.
I do agree about the trick, But the landlord didn't accept it, I suggested 1290, but he didn't like it. He wasn't happy with any change.
I do craigslist, but you are right, I need more advertisement. I left some flyers in front of the house. I should find other ways as well.
0 Reply
Steve Babiak
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
11y
What's wrong with this picture? "I can't find tenants" reflects incorrect thinking; start thinking differently, because tenant prospects have to find you!
As an agent, you probably have this on the MLS. As you should, since you pay your dues. But you have to market in more ways than just the MLS, because most tenant prospects aren't looking in the MLS. The tenants that are going through the MLS for the most part are those who have retained an agent to help them find a new residence.
Then you have to measure your showings and how each prospect found the place for rent; that way you get an idea of the marketing that works for that unit. Different things work better for different people and different locations.
3 Reply
Ursula B.
Involved In Real Estate · Winston-Salem, NC · Member since 2013 · 277 posts · 188 votes
11y
Trying staging the common areas, like living room, kitchen and baths. Those areas rent houses, and even a lightly staged home shows better. It may be that prospective tenants cannot see themselves living in the space, so you have to show them how the space can work for them.
Also offer no application fee. Be sure you screen, screen, screen though, because some folks will apply just because there is no application fee. You still want a tenant that meets your criteria.
1 Reply
Roy N.Pro Member
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
11y
But it's a bigger anxiety to watch the months tick by while you try to evict a tenant you should not have accepted in the first place ... at least while empty, there is no wear or tear on your unit. ;-)
7 Reply
Aly W.
Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
11y
Exactly @Roy N. !
0 Reply
Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
11y
Unless you are in an exploding rental market where demand can't keep up then you DO NOT want to push top market rents.
It's a common mistake I see over and over. People get greedy and want top of the market. Problem is they up the rent year over year to stay top market to try to top out cash. The property however starts showing it's age. The tenant sees this and moves on to newer places for the top market rent they are paying.
Now you have tons of repairs and reconditioning costs to land a tenant again and months of lost rent.
The investors I know with lots of doors buy with the goal in mind of having a great deal with rents in the middle of the market. Then they keep the units full as even when rent goes up every year it's still one of the best deals in town. They make more cash flow with less turnover and repair costs then squeezing out that top market rent.
If a place stays 100% occupied with a line of tenants to rent then you need to up the rental rate. You do that until the market starts pushing back with your goal occupancy rate of say 95%.
You want great occupancy but not to leave money on the table. It's an art form to stay in the middle of rents but limit tenant turnover.
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1 Reply
Joseph Chen
Houston, TX · Member since 2014 · 62 posts · 23 votes
11y
Are you working on a Realtor? If yes, then ask him/her to list your properties in MLS and other real estate websites. The best way to reach out target buyers nowadays is through internet. Or ask you Realtor if she/he knows prospective buyers of properties.
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
11y
LOwer the rent... .every month its vacant you lose 1200 plus dollar.. so you could lower rent by 100 bucks and fill It quickly and end up at the same place or better if you hold out for higher rent that never comes...
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Guy M.
Flipper/Rehabber · Williamsburg, VA · Member since 2008 · 143 posts · 105 votes
11y
Originally posted by @Neda Navidnia:

Hey all,
I have listed a property in Katy, TX. It's been on the market for about one month. I believe the price is good according to CMA.
It is a two story, with all bedrooms upstairs, some people say they need at least one bedroom down. It is in a good condition, 2006, 4 bedrooms, 2 and half bath.
Making it short, I don't know what is wrong. Please advise how could I find the problems on my side. The rent was 1350 and we changed it to 1300. But it didn't solve the problem.
So what else should I do.
If you don't mind me asking,
What are you doing for advertising? Such as:
- Craigslist
- Bandit Signs
- Military National Guard/Reserve Centers
- Automated Housing Referral Network (AHRN.com)
- Etc.
In Virginia Beach, bandit signs were very effective (believe it or not) for me. Craigslist, too. Also, advertising on non-local Craigslist sites works just fine. People move into TX all the time I'm sure. I know several people in the St. Louis area from TX. You may snag some out-of-towners looking to move near Katy.
1 Reply
Rob Gribben
Bel Air, MD · Member since 2014 · 119 posts · 36 votes
11y
Do Craigslist, and re-post often to get your ad toward the top of the board. It gets to be a hassle, but once you are too far down the list, nobody sees your ad. Hang tight, sure you'll find tenants if it's priced correctly for the market.
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