100% Occupancy

13 Replies

As of yesterday, I have 100% occupancy in my portfolio.  The last time this happened, I had 9 door.  I bet it won't last any more than 1 month...

However, this does explain why I am so bored with REI, as is evident from this other discussion :)

So I called @Brandon Turner  to complain about being 100% full, and he says:

"...yeah - me too; but, I've got 3 notices of people moving out in a couple of weeks..."

HAHAHAHAH!!!  Brandon - you kill me, and still I love you.  It's very hard to say why...

Well done Ben. Vacancy has been my #1 profit killer. I have been able to nail all of my estimates on expenses, rehabs, etc, but vacancy has been tough. That's what happens when you buy lower end properties. Lesson learned!

@Ben Leybovich  

Other than the unit in the midst of a total gut renovation (3 dogs, 2 cats, 9yrs ... you get the picture) we have one room in our {international} student house turning over next week.  

We were at 100% until the unit under renovation came-up in October (tenants bugged out w/o paying the rent ... their response to being given notice of termination for December 31, 2014).    Everything else remains full  ... but it never lasts.

@Austin Lee  - yeah, this is what happens when you buy pigs - people don't want them, and those who do can't afford to stay in them.  I've written about $30,000 houses :)

Lesson learned - good!

That is awesome!

Hah @Ben Leybovich   my point was - as a multifamily investor we continually have movement in properties.  You and I are in the same boat here. As is Brian Burke and every other landlord. It's part of the job and something you get no matter what size property so it never bothers me anymore.

Vacancy is unavoidable but plan-able. But my 3 units vacant out of 42 is only 7% vacancy, and I'll get them all filled within a week of them going empty, which means this vacancy will be 1.7% of my gross. I can handle that. 

The nice thing is though - I won't know what units are empty, what they look like, I won't take the phone calls to get them filled, I won't show the units, I won't sign the leases. I just get a little higher checking account balance at the end of the month. This is what systems are all about and this past year has been amazing for that! Speaking of that-  when are you gonna stop managing your pigs and let someone else handle it?! 

Congrats Ben!  I was basically 100% full at the beginning of last month, but then one of the tenants decided that they didn't care to pay the rent.  It gets much worse ..., but I hope you're not jinxing yourself like I apparently did. :)  

@Cal C.  - hahaha...my posts states that I fully do not expect the 100% occupancy to last any longer than 2 weeks :)

Anything more than that would be a bonus.

@Brandon Turner  - I'll do that when it takes more than 5hrs/month :)  There's a difference between my pigs and yours - mine are Kosher...lolol  

You guys are funny.

The only time I have seen 100% stay for a long period of time is when the rent of the complex is a lot under market rents.

Some landlords want to be cheapest or close to the cheapest and have waiting lists to fill up.

Tenants paying top market rent will usually be over demanding and as the property gets older look for the newer place again because they are paying so much. Tenants in a place that is under market rent do not want to rock the boat so usually cause little problems as they know they have a good thing going.

Should you raise rents?? It varies. If you buy at such a great price that you have monster cash flow then just raise the rents 3% a year and still be under market year over year and keep filled. Turnover is what kills your cash flow. You do not want to push top market rents with long term tenants as when they leave you will be dropping thousands per unit or more to make rent ready again. It will take a very long time to get to breakeven income with the repair money spent. Granted NOI could be increased but at what cost upfront??

That's the decision that needs to be made going in and not after buying and scrambling to think of possible exits years later. I see it all the time where people say if I buy this now it's not doing the best but after the rents are raised and ten other things happen then this will be a winner! Rarely happens that way.

I don't want to ever deal with low income tenants again. Too much drama and it can suck the life out of you. I don't care about perceived extra cash flow if I have to work extra hard for it and it ruins my quality of life.

I just do not like pushing top market rents because their is always someone around the corner that is newer trying to take away tenants with their brand new build or rehab project. 

Awesome man, I get excited for people when I hear things like that!  I haven't had 100% occupancy in the last 3 years!  In my mind that's a good thing (kind of) though, because I keep buying rental units.  Out of my 22, I have 5 unoccupied, but they are also not 100% livable yet.  Its my fault sometimes buying more when I do not have things done on the last one yet.  Live and learn I guess.  Congrats though man!

That's about as funny as I get. You should see me when I am serious ........... HA! ...... : )

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