Real Estate Investor · Westminster, CO · Member since 2014 · 201 posts · 74 votes
I am closing on two SFRs at the end of June and I want to start pre-marketing them for an August move in date. Trouble is, the rehab will probably be done only days before the move in time period. Does anyone have a trick to being able to properly market a property that is not yet fully rehabbed?
Fortunately, I can probably take an as-is photo of the front and it will look rentable. It's the inside that's an issue.
Could you post, "Choose Your Finishes!"? It might get people engaged sooner and more likely to jump in early for the opportunity for their preferences. Now, I'm not advocating for allowing a lot of options - that could derail your timeline. You might be well into orders for cabinets, flooring, & appliances by the time someone asks about options (wink, wink), but now they're interested and maybe you could squeeze in a different backsplash or paint colors. For the buyer, it's about visualizing what could be there, not what is.
You could use a sign on the front of the house. When people call, explain it will be ready to move in on the date you expect. Depending on their urgency, they might wait to see your unit. Marketing is about getting the contact and that would happen.
But you could find that they want to commit and move in before school starts in September or even late August in some cases. Those people won't want to wait very long to see yours. And not many have the vision to see a finished look while the unit is under construction, even when they say they have such vision.
I wouldn't recommend showing a house that isn't fully rehabbed. Personally I would wait until it is rehabbed and staged to market the house. Maybe a sign like Steve mentioned or some coming soon posts on Craigslist might help your cause but personally I wouldn't do it. I would just try to fly through the renovation and get it on the market as soon as possible.
One thing I saw was a bandit sign in a yard saying currently being renovated by ABC and their website. Their website had previously rehabbed houses so maybe a potential buyer could see the quality and gain interest
interest.
Also remember if you advertise that you are rehabbing a home with signs in the front yard you are advertising this to thieves, code officials, and teen trouble makers as well. Just food for thought.
It works best to wait until it is close to move in state, people will have a more favorable view. But it will likely sit empty for awhile.
If you aren't concerned about theft or people tromping through during construction, start marketing and take time to explain what is and isn't changing. You may attract more desperate people, or people planning ahead or wanting a neighborhood or school district.
We market our properties once we start the rehab and in a number of cases we are able to rent properties before they are ready. We also have properties that are finished and move in ready, so we show the tenants our finished properties to give them an idea of what our finished properties look like.
We have not really had any major issues renting properties this way. Also, in a number of cases our properties rent out more because of the areas they are in. If you own properties in a good area, they are much easier to rent out even under rehab than a finished property that is not in a good area.
These units will be ready come end of August so I am right on that school move bubble. It's possible that they could be ready mid august if all goes well.
The Denver rental market is VERY strong so I am hoping to have it rented in advance of the completion of the rehab.
I'm on the fence as far as a sign because of what @Derek T.
said about thieves. I don't think the area is crime ridden but I also don't like the risk. I also know that signs are an excellent way to rent a home because the neighbors all want their friends to move in next to them or across the street. Of could a simple meet and greet with the neighbors could solve that.
What does anyone think about using photos of other rehabbed properties with a big disclaimer that this is not the actual unit but the renovated unit will appear like the one shown? I would have to borrow a photo from someone else as I do not have my own rehabbed properties to draw from.
It's different from person to person but from someone who has dealt with break ins and thousands of dollars worth of damages and material stolen in an area that's not bad, I would mitigate all risks in the future. It only takes one $6-7k lesson to make me start being more cautious.
We have done this in the past and have found it works to just put a simple "Coming Soon" sign in the front yard. You will be amazed at the responses you will get, maybe even get the unit rented before you even have to officially put in on the market.
I assume that it will be kind of obvious that the house is being worked on since the lawn is about 6 feet high right now and it looks abandoned. Suddenly it's going to look like there is activity and thieves know what to look for. I am wondering if having or not having a "coming soon" sign makes a difference. Would the house be broken into regardless of the sign? Just a thought.
I understand that it may be obvious that the house is being renovated but how obvious is it that it is not owner occupied? If your house gives the impression that it is an owner occupied renovation I am sure vandals would think twice about it. There are measures you can take to make it less obvious and further protect yourself.
Then my next question would be if it is that obvious that it is being renovated and not owner occupied then what are you doing to protect your investment? Do you have an alarm system, motion detectors, alarm signs up, etc.? Do you have your lights on a timer or maybe even a fake camera? Do you have a cage for your AC unit? All this stuff is pretty inexpensive and will more than pay for itself if you ever have a break in. Many people think because a neighborhood is good that a house can be vandalized. I can't tell you how many REOs I have seen in good neighborhoods that were missing AC units, cooper, etc.
People don't tend to think of the security piece because it rarely happens. But when it does (and hopefully it won't happen to anyone else) it changes your view on things. For me the sign is just part of the discussion. I try to protect my investments with alarms, etc and not openly advertising that it is vacant. Personally I don't even put Realtor signs in my yards. I don't think there is a right or wrong to this.........just different ways to view something and different ways to do business.
@Bill Coleman what happens when your rehab doesn't go as planned and the place that you rented for Sept 1 still is not done or even close to being done? It has happened. If you are pulling permits they can make you do more work, there can be hidden issues, the contractor could fail to deliver, if you don't use permits someone could turn you in at the last minute and you spend the next 2 months smoothing feathers at City hall.
You can try but I have found it to be a huge waste of time. People simply can't envision the improvements. Pictures of other properties might help.
I've done this in the past and it has not really worked out. Once a sign is out in the yard, usually folks will want to come inside and take a look which can disrupt the rehab process. In my experience, I've found it's best to market the property once it's ready.
@Bill S. Thanks as always for your comments! I can always rely on you to post and I thank you for that greatly.
Perhaps a way to bridge the gap is to wait until the rehab is well underway and you can see the light at the tunnel - perhaps 1 month out. Then post the sign and advertise the property. I think that the strength of the rental market here in Denver will cause people to jump at properties they normally would not consider. Including one that does not have rehab complete.
But Bill, I get what you are saying about a project not being completed on time. My contractor says that we don't really need much in the way of permitting for this project so that should not hold us up.
It is difficult to show a property that is not rent-ready. Would you sign a one year lease with a guy you've never met who just started the demo on a home in that condition? It doesn't mean you can't try though! Just make sure you can follow through on your promises if you do find someone to sign the lease in the early stages.
Since you have a couple of weeks, make sure you are ready to roll on day 1 and focus on moving up the completion date because it should be easy to rent after all of the work is done. Good luck!
Obviously there are benefits both ways: It shows 10000% better once it's rehabbed but you can save a few months worth of carrying costs if you can get a contract while its in process.
As far as marketing it while in rehab: The usual ways: MLS, Yard Sign, Craigslist would be my suggestions.
My opinion is to complete the rehab and then put it on the market. If you're in a hot area you stand a good chance of getting buyers to compete for it and driving the price up.
What about waiting to the beginning of August to have a feeling of the time necessary to finish the rehab and if you think it will be ready on time then put the coming soon signs in the yard and in Craiglist
The tricky thing here is the last days is when you can see a real difference in the house, when the last touches are been done
You are more likely to get top dollars when people see fine finishings and everything is clean and polished, but maybe receiving a little less money is better that sit and wait paying holding costs
Could you post, "Choose Your Finishes!"? It might get people engaged sooner and more likely to jump in early for the opportunity for their preferences. Now, I'm not advocating for allowing a lot of options - that could derail your timeline. You might be well into orders for cabinets, flooring, & appliances by the time someone asks about options (wink, wink), but now they're interested and maybe you could squeeze in a different backsplash or paint colors. For the buyer, it's about visualizing what could be there, not what is.
I normally put a sign in the yard as soon as I close on the house, but I don't normally have a rehab take longer than 30, at most 45 days.
It's never caused a problem, but I don't let them pick the colors, etc,,I tell them it will be our standard colors/finishes, and show them pictures of previous houses.
I prefer not to sign a contract until I am far enough along with the rehab that I know it will be ready when the move in date comes,,,I have literally finished the rehab in the morning and have someone move in that afternoon
Thieves are going to know it is getting redone regardless of what you do. Since we have such demand here in Denver, why not wait until you know 100% that you are two weeks out from completion?
I list my houses as soon as they are under contract and I know the date they will be rented. I put just a picture of the front and say more pictures coming soon. I also start at the high end of what I think the house is worth as I have a lot of time. You would be suprises how quickly these houses will go!
The BEST thing to do is to advertise an open house and don't show the house until it is fully refinished.
If you want to advertise online, then I suggest you only show pictures of rooms that are already fully finished and add more pictures later as soon as the rehabbed rooms are finished.
Again, thanks to everyone for the great discussion.
Perhaps I will park my third vehicle at the unit until the construction is done plus use lights on timers and get some blinds up immediately. That way it will look like someone is there. Especially if I have my contractor move my truck around.