can't find tenants - links included

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can't find tenants - links included

George P.
Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes

i (once again) am having trouble finding tenants for my latest house.

website - http://onpointrentals.com/index.php?p=1_16

craigslist ad - http://detroit.craigslist.org/wyn/apa/4226172664.html

it has no garage, good suburb, but with C schools. older neighborhood, but one street over from a C suburb.

3 bed, 1 bath, fully updated as you can see from the pictures. basement is cleaned out, bright and painted. not finished. appliances included

started working with a new realtor and she listed it on the MLS at $1,050. had 3 showings and nothing. one commented on the proximity to the C suburb. 2 weeks later, dropped it to $995. it's priced right based on the comps.

the previous realtor was very demanding with potential tenants, so i switched. i have also had simultanious ad on CL and nothing. days go by without any action.

i know the lower i go, the worse the potential tenants would be.

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Jon Holdman
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
12y

In my experience, just the opposite is true. Price it at or a little under the market and you'll have more applicants. Price it above the market and you'll get a crummy tenant. Better applicants have more choices and will choose a better priced choice. Crummy tenants have few choices and will pay a higher price.

Realize its a slow time of year. So, you're not going to get a lot of traffic.

You say its one street over from a bad area and that its priced right based on comps. Are those comps also just one street from the bad area? If not, they're not good comps. I had this problem with a house I sold. One block to the south would have been worth 5% more. One block to the west and it would have been 10-15% more. As it was - on a busy street across from a high school - the choice of comps was very limited. The proximity to a defect like this bad neighborhood can be significant. If its priced comparably to other properties that are further away, you'll have to be cheaper.

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  • Account Closed
    Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
    12y

    What are other homes in the area renting for?

    Joe Gore

    0Reply
  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    12y

    In my experience, just the opposite is true. Price it at or a little under the market and you'll have more applicants. Price it above the market and you'll get a crummy tenant. Better applicants have more choices and will choose a better priced choice. Crummy tenants have few choices and will pay a higher price.

    Realize its a slow time of year. So, you're not going to get a lot of traffic.

    You say its one street over from a bad area and that its priced right based on comps. Are those comps also just one street from the bad area? If not, they're not good comps. I had this problem with a house I sold. One block to the south would have been worth 5% more. One block to the west and it would have been 10-15% more. As it was - on a busy street across from a high school - the choice of comps was very limited. The proximity to a defect like this bad neighborhood can be significant. If its priced comparably to other properties that are further away, you'll have to be cheaper.

    3Reply
  • George P.
    OP
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    12y

    the main street (2 lane road that cuts the C suburb and my suburb) is one street over. there is a house for rent there for $800 (no basement, not updated). 82 days on zillow

    on my street, there is one for 900. 11 days on zillow, it says move in ready, but no pictures. had not seen it until today.

    two streets in the other direction, there is one for 1100 and 1.7k for rent.

    the last time i looked at the SOLD comps, they were above what i was asking.

    0Reply
  • George Paiva
    Investor · Milford, CT · Member since 2012 · 592 posts · 285 votes
    12y

    It's just a tough time of the year and to add Detroit isn't exactly Texas growth.

    I've been having a very tough time filling in vacancies in the last 2 years here in CT as well. Not warzone areas not even D areas but when there is no growth regarding population or employment you just don't get a lot of healthy traffic.

    Good Luck and hang in there. I will need it too as I have a vacancy in turnover renovations right now and another available this week after Marshall throws out the latest deadbeat.

    1Reply
  • George P.
    OP
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    12y

    i have a buddy that has 6 in a C- area and his rents are up to 850. he can't rent them fast enough and has 1-2 weeks max between tenants. sure, he has more problems than me with tenants late/not paying, but damn....

    i think the higher the rent, the pickier the tenants... and my houses are all nice.

    george, what is the average time it takes you to fill a vacancy?

    0Reply
  • Elizabeth Colegrove
    Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes
    12y

    @George P.

    Honestly I find this time of year is just tricky!! We found that the military, DOD and veterans have a definite moving season. We found that when we rent during "moving" season our places rent at "market" or above in 1-7 days. Non moving season those same houses rent 7-50 days AND for $50-$100 less.

    Since there is a definite moving season, houses are much cheaper to acquire during the winter than the summer. The competition is down/almost non-existent. Therefore we tend to rent the houses the first time for 17-19months depending on when they were acquired. This gets them filled on the tax returns and than we raise the rents the following "moving" season.

    1Reply
  • Michaela G.
    Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    12y

    Why not make a flyer with details and distribute to the neighbors. It'll give them the option to have their friends live close by. Offer some kind of reward.

    If they can convince good friends to move close, then they might also stay longer, because of the proximity to each other

    1Reply
  • Bryan H.
    Investor · Willow Spring, NC · Member since 2013 · 788 posts · 285 votes
    12y

    I'm seeing many homes, including my 3, in Michigan go very close to the Zillow estimate. Unless the home has much more to offer than nearby comps, I'd shoot for close to that. I bet if you lower to $925, it will rent right away.

    Rent-o-meter says $850-$900

    Rentmetrics says $922

    Your place is nice and clean. The houses with higher rents are real nice though and have 2 baths.

    0Reply
  • Deborah BurianPro Member
    Rental Property Investor · Oklahoma City, OK · Member since 2013 · 1k+ posts · 412 votes
    12y

    In re: location, I'm getting killed right now on a really nice three bed on a very busy road, house has no fence.

    I agreed to show it for an acquaintance and am running it through my existing marketing system. It's been up for almost a month, we've reduced the rate to $800 (approx $75 below market) and nada. Nothing. Nilch. Driveway opens on to the extremely busy road and I personally wouldn't even have considered the house. I'm guessing it'll end up $100 or more below similar properties because of the street.

    My normal A/B house turnaround this time of year is 1-2 weeks and that's waiting for the right tenant.

    0Reply
  • Chuck W.
    Real Estate Investor · salem, OR · Member since 2013 · 105 posts · 32 votes
    12y

    How about a free month's rent with a one year lease ??

    Vacancy factors here in my area of Oregon have been low since the down turn.

    Good Luck

    0Reply
  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    12y

    Seems the problem is not enough weight is given to external factors. In the sellers mind who is leasing or selling they reduce 10% factor. The buyers or renters are thinking 30% off.

    It's the same kind of thinking when selling a house and the seller says let them paint and do things and we will take 10% off the price. The buyers are thinking I have to do all this labor and time so I will need 25% off to justify my time.

    A tip for everyone is if you have a property you are looking to purchase in a transitioning area or busy road factor in your exit strategy. Likely the property will be sold commercial eventually or part of a new residential development. Knowing this you have to buy much lower so you can rent lower and hit your numbers still.

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    0Reply
  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    12y

    I would call back the prospective tenants and say " What is the one MAJOR issue that is keeping you from renting this property today? "

    Then they will say location, one bedroom, bath to small, extra pet fees, no garage, rent to high for what it is, etc., etc., etc.,

    Heck maybe the renters are thinking they need to buy Christmas presents so have low cash on a security deposit or can't do a high rent payment. If they qualify all the other ways you can work with them to get it filled if they are quality.

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  • Rob K.
    Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
    12y

    It's a slow time of year. Many of the people who look to move in December are losers.

    I have also found that the lack of a garage is a major turnoff. It's easier to rent a house with a garage and no basement than a house with a basement, but no garage.

    Did you put those appliances in? I would suggest going with black instead of white in the future. The price difference will be little if any, and it will look a little more modern.

    0Reply
  • David Krulac
    Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
    12y

    @George P.

    I say that its a bad time to rent, particularly in cold snow areas (except at ski areas) from Thanksgiving to Super Bowl.

    I also say that you should avoid streets with yellow/white lines down the center of the road. These are roads with more traffic. Residential side streets don't have line painting.

    And if you over charge or charge at the top of the market imho, you do get less qualified prospects.

    1Reply
  • George P.
    OP
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    12y
    Originally posted by Rob K:
    It's a slow time of year. Many of the people who look to move in December are losers.

    I have also found that the lack of a garage is a major turnoff. It's easier to rent a house with a garage and no basement than a house with a basement, but no garage.

    Did you put those appliances in? I would suggest going with black instead of white in the future. The price difference will be little if any, and it will look a little more modern.

    surprisingly (the 3 showings), there was no mention of lack of garage.

    the appliances are white because they stayed with the house. so, i just put in a white dishwasher.

    i have had great tenants that move in december and january. so i just hope it's the pre-holiday problem. i remember a few yrs ago that i had a fantastic house (25k updates) and took 4 months to rent. i did not have a realtor at that time (mistake). it was listed mid october and it rented in february. i attributed that to my stupidity not to use a realtor and save $1,100.

    0Reply
  • Rob K.
    Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
    12y

    Is there a shed? If not, I have had good luck with the rubbermaid type plastic sheds. Easy to put together and you might not need a permit (depending on size).

    0Reply
  • Bill S.Pro Member
    Moderator
    Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
    12y

    You need to step up your marketing. Craig's List and MLS are not the only way to market. Who do you think would be the ideal tenant for the place. Market where those people are. Flyers, Word of mouth (with generous referral reward). Your current tenants in other locations, facebook, previous tenants, fellow landlords, All the RE Agents working the area, local businesses. You want everyone to know you have a place for rent.

    Around here zero replies from CL is a sure bet that you are way over priced.

    Also last weekend was a throwaway for renting. This weekend is when people will look. Run a move-in special. $99 for Dec rent. Most people are looking to rent for Jan 1 now so the less money upfront the more money for Xmas. Advertise this. Think of the utilities you will save by having someone in there.

    0Reply
  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    12y

    Are you only using the MLS and CL?

    CL used to be awesome and I always got tenants. But this year I have rented out 4 units and CL did not drive a lot of traffic. I used www.postlets.com to post to multiple sites and I got great traffic from HotPads, Trulia, and Zillow. FYI Postlets is free.

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    2Reply
  • George P.
    OP
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    12y

    thanks for the suggestions. they really help me think outside the box. i put the house on postlets but nothing so far. those sites are very similar, so i did not bother to put them on the other ones.

    i had one showing by another realtor today, should get feedback soon.

    it's the first showing in 2 weeks, i think.

    0Reply
  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    12y

    Postlets takes about 24 hours for it to be searchable on the other sites - good luck!

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  • Jassem A.
    Investor · PA · Member since 2013 · 1k+ posts · 602 votes
    12y

    I've noticed having several Craiglist ads help and I don't usually price anything over 900/mo unless it's in a "good" area. After an ad has been up for 2 days, I will delete it and then repost it. At that point you will probably get more calls but in order to get someone to sign a lease you might have to relax your screening criteria and accept a tenant with bad credit but good rental history for example or demand a 2 month security deposit or first/last plus full month security.

    0Reply
  • George P.
    OP
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    12y

    i put my CL ad every day. i delete the old one and put another one. if you click on the CL link i posted, it would give you an error..

    i just got feedback from the showing this am - no garage and did not like the proximity to the C area.

    i have accepted people with 500 credit due to foreclosure, but with good payment history.

    0Reply
  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    12y

    What would the property rent for if it was actually in the C area?

    0Reply
  • George P.
    OP
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    12y

    i asked the agent if proving a shed would be helpful. people have to store their lawnmower and snowblower somewhere...

    0Reply
  • Jassem A.
    Investor · PA · Member since 2013 · 1k+ posts · 602 votes
    12y

    if I'm really in a rush to get someone in there I will renew an ad for the same house morning, noon, night and sometimes more. If you put "For rent by owner" in the title, you might generate more calls from people that might not otherwise get approved for housing anywhere else (besides motels) and not necessarily for good reason.

    1Reply
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