Timeline to buy SFR to have a tenant placed
Member since 2022 · 9 posts · 1 vote
Timeline to buy SFR to have a tenant placed
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Investor · Member since 2021 · 591 posts · 695 votes
3y@Mark Stevens it depends on a lot of factors--such as the grade of the property & neighborhood, the rent price, whether the unit is at, above, or below market rents, the availability of tenants, the supply of competitor rentals, the priority that the property has with the PM (which depends on the ratio of how much revenue the property is going to generate for the PM versus how much hassle the property is for the PM to manage), the PM's level of experience with advertising & placing tenants, whether the characteristics of the property match the needs and desires of the tenant pool, etc., etc.
Personally, I like to have a tenant lined up before I even close on a property, but I manage all my own properties, and I have an existing pool of tenants who have rented from me in the past--which makes the process a lot easier for me...
If I didn't have that advantage, I would typically advertise the property for a week, and if it didn't rent, I would re-assess and consider things like: what response did I receive? What were peoples' reactions when they viewed the unit? How does my property and rent compare to competitors? etc. ...if I had received a large and positive response from prospective tenants in the first week, I might let it ride for another week to see if anyone signed, but if I got a small or negative response from prospective tenants in the first week, I would re-analyze the market and probably lower the rent and/or do something to make the property more appealing.
If this is your first property, and if you want to become a successful real estate investor, I'd strongly suggest you manage the property yourself for at least a year--this will teach you invaluable lessons that you'll need to succeed in REI. In my opinion, it's very difficult to succeed in REI without any personal experience managing properties. Think of it this way: owning a portfolio of PM-managed properties without any personal experience in property management is a bit like trying to manage a mechanic's shop with zero experience fixing cars, trying to coach a team to an NBA championship with no basketball experience, or trying to manage a law office with no legal experience.
Good luck out there!
7 Replies
- Real Estate Agent · Rancho Cucamonga, CA · Member since 2018 · 82 posts · 36 votes3y
Depends on the quality of the property when purchased.
If you purchased a turnkey house, you can have a tenant in a few weeks after the property closes.
If the property needs work, you'll need to hire contractors to get into the home, fix the issues, and then list your property for rent.
Listing your property for rent and screening tenants should take 2-5 weeks, on average. Try Zillow! - Member since 2022 · 9 posts · 1 vote3y
So perhaps it is best to plan for 2 months of payment before I can find a tenant. (To be conservative)
what's a good rule of thumb?
- Investor · Member since 2021 · 591 posts · 695 votes3y
@Mark Stevens it depends on a lot of factors--such as the grade of the property & neighborhood, the rent price, whether the unit is at, above, or below market rents, the availability of tenants, the supply of competitor rentals, the priority that the property has with the PM (which depends on the ratio of how much revenue the property is going to generate for the PM versus how much hassle the property is for the PM to manage), the PM's level of experience with advertising & placing tenants, whether the characteristics of the property match the needs and desires of the tenant pool, etc., etc.
Personally, I like to have a tenant lined up before I even close on a property, but I manage all my own properties, and I have an existing pool of tenants who have rented from me in the past--which makes the process a lot easier for me...
If I didn't have that advantage, I would typically advertise the property for a week, and if it didn't rent, I would re-assess and consider things like: what response did I receive? What were peoples' reactions when they viewed the unit? How does my property and rent compare to competitors? etc. ...if I had received a large and positive response from prospective tenants in the first week, I might let it ride for another week to see if anyone signed, but if I got a small or negative response from prospective tenants in the first week, I would re-analyze the market and probably lower the rent and/or do something to make the property more appealing.
If this is your first property, and if you want to become a successful real estate investor, I'd strongly suggest you manage the property yourself for at least a year--this will teach you invaluable lessons that you'll need to succeed in REI. In my opinion, it's very difficult to succeed in REI without any personal experience managing properties. Think of it this way: owning a portfolio of PM-managed properties without any personal experience in property management is a bit like trying to manage a mechanic's shop with zero experience fixing cars, trying to coach a team to an NBA championship with no basketball experience, or trying to manage a law office with no legal experience.
Good luck out there!
- Member since 2022 · 9 posts · 1 vote3y
Thanks Leo for the nuanced answer. It shows your experience. Appreciate it. Sucker for more tips
- Rental Property Investor · Oregon City, OR · Member since 2020 · 324 posts · 780 votes3y
You want plenty of months in reserve. I've had rental properties vacant for 6 months + because of evictions, turns and renovations.
PM will be typically taking first month's rent. And, it'll probably take you a bit of time to find a quality tenant depending on a few factors. If you have an attractive property in your backyard (Dallas) it shouldn't be an issue.
I lean towards the sides of safety and slow growth as opposed to high risk high growth. I'd conservatively say 1-3 months before you have a tenant placed.
- Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes3y
I'd say 30 days.....but of course depends on what rent you want, what time of year, where the property is, what price range and so many factors.
Typically I say Summer rents better than Winter, especially in great school districts.
If you're above probably $3000/month in rent might take 60-90 days and maybe longer depending on how far up the price scale you go....
Probably $1500/month and less in metroplex, might be a week or two.
Homes that allow pets seem to rent faster than those that don't....so could depend on where you are there.
Seems like the last few I've rented went pretty fast if the condition was good and the rent was right....people wanting to apply and move in a few days.
Some post said try Z....and I would say just the opposite....typically I get the worst applications from there, but maybe it depends on how picky you want to be.
So typically your first payment is about 1month after you close. So if you close Jan 31st, typically first payment would be March 1st. So you might get rent and deposit before first payment due....or as you suggested might have to make 1 or 2 payments before rent starts coming in. You probably want utilities on as well in case we get freezes. Utils are typically pretty minimal, but does add some expense.
I like @Leo R. response about managing yourself. I often take care of renting for my investor clients, but turn PM back over to them at move in. Otherwise you can also have some delays in payment as a PM will typically pay you after they've had the money about a month....and they hold the deposit. So if you rent Mar 1, you might not get that money until end of March.
I'm in DFW area near the airport if you ever want to sit down and talk about different scenarios. Also some of the area REIAs often have good sessions about things like this.
- 3yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Depends on the time of year. Winter takes the longest.
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