House not renting

44 Replies

It has been cold here in Michigan, but I have had an unusually small amount of inquires on this house.  Are any of you having better luck? Here is my ad:   

http://www.zillow.com/homes/for_rent/Burton-MI/house,condo,apartment,duplex,townhouse_type/2104085411_zpid/3905_rid/days_sort/43.055593,-83.556948,42.952276,-83.709726_rect/12_zm/

My Roseville 2 bd rented in 4 day.  795 they move in this weekend

Originally posted by Mark Forest:

It has been cold here in Michigan, but I have had an unusually small amount of inquires on this house.  Are any of you having better luck? Here is my ad:   

http://www.zillow.com/homes/for_rent/Burton-MI/house,condo,apartment,duplex,townhouse_type/2104085411_zpid/3905_rid/days_sort/43.055593,-83.556948,42.952276,-83.709726_rect/12_zm/

I took a look at your ad, as well at those of your competition. Your's looks better than most, but is significantly higher priced than your nearby competition. That could be a big factor. To rent up more quickly, develop an ad that sells a lifestyle, not just a house description. If people know more about the place and can resonate with it, they are more likely to consider renting. Also, have you marketed anywhere else, or only on Zillow? How about some mini-blinds or curtains for those windows? At least take down the sheets, as even a bare window will look better. Maybe a few better angles on some of the photos, such as the living room and kitchen... such as taken from one corner to another so you have diagonal lines for a more interesting view. Just my initial thoughts... hope they help.

Marcia Maynard, Fischer Properties | Podcast Guest on Show #83

Honestly the issue is usually price. I look at your house and competition. While it looks awesome I have found that people only look at a price up to X for X number of beds. You house is much higher than all the other houses but 100's. In my area 25-75 can be the reason between 20 inquiries and 0-2.  The only houses I see priced near yours are those with 3 beds. I think you are over priced without allowing something that your competition doesn't to set you apart.

Have you thought about allowing pets? When you look at your house compared to every where else, there are only 2 others that allow pets. We allow pets and find that we get a higher price because no one else allows pets. We still screen very well and even charge a higher security despot or pet rent, but have found that this allows a much great audience. Since the demand is high while the supply is low! 

Yup, as @Elizabeth Colegrove pointed out. If a house doesn't rent, it's usually the price (assuming it's in rental ready condition). 

I pulled a rent report myself and the estimate is $575/mo for your 2 bd/1ba 912 sqft SFH. (also zillow is accurate for once as well lol). Rents were pretty flat for past 12 mo in that area.

Originally posted by @Marcia Maynard :

I took a look at your ad, as well at those of your competition. Your's looks better than most, but is significantly higher priced than your nearby competition. 

Thanks for the suggestions Marcia.  I never thought about the photo suggestions.  We paid $26K for the house and put about $2k in flooring and furnace repairs.  I hate to only get under $600.  My wife always looks at how long it takes to pay us back with rents.  She wants two years.  

This time of the years does matter.  Snow prediction here is 4-8 more inches of snow tomorrow.  Not ideal conditions.  We just got a tenant for a house in one week, I was surprised at it renting so fast.  Our rent is in the middle, not too low nor too high.  also have another tenant moving in Feb.

I look as Super Bowl and/or first 60 degree day in Feb as the break in the winter/snow season. 

The timeline for paying back the cost of the house is absolutely irrelevant.   What you would hate to get just doesn't matter.  You have to price it based on the market for similar properties in the area.  And similar means beds, bath, garage, etc.  If you're put granite countertops in an area where formica is common, you won't get a dime extra for that.  Rentometer says "Your rent may be way too high" and says the median rent for that area for a 2 bed is $500.  That may not be perfect, and you should certainly do a careful survey of rents for similar properties in the area.  But it appears you are so far above the market that you probably aren't even getting responses to your ads.  You need to get your rent in line with the market or its going to sit empty for months, maybe forever.

Further, if you do get a tenant who will pay that price, it will be a disaster.  Sometimes investors think "I'll price it high to get a good tenant".  In fact, the only tenant that will over pay is one who struggles to get accepted anyplace.  So, they suck it up and pay your high price.  Get yours priced right at or a little under the competition and you'll have plenty of applicants, assuming there are applicants to be had.

Jon Holdman, Flying Phoenix LLC

Originally posted by @Jon Holdman :

The timeline for paying back the cost of the house is absolutely irrelevant.   What you would hate to get just doesn't matter.  You have to price it based on the market for similar properties in the area.  

I understand.  Given that we have almost $30K into this house would you say we overpaid given the potential rents for this area?  I am trying to find the lesson here.

Originally posted by @David Krulac :

This time of the years does matter.  Snow prediction here is 4-8 more inches of snow tomorrow.  Not ideal conditions.  

Plus it has been VERY cold, so i think people are reluctant to even get out of their car. But yes, we do appear to be over priced.  

Steve,

Can you try reducing the price by a few dollars. Sometimes we get good luck by dropping the price by a marginal amount so that we get a new set of lookers.

Glenn G.

Originally posted by @Glenn Gurvitch :

Steve,

Can you try reducing the price by a few dollars. Sometimes we get good luck by dropping the price by a marginal amount so that we get a new set of lookers.

Glenn G.

I was thinking $650, but my wife is reluctant to go there.  

just drop it 5$ and it can refresh in all the Trulia, Zillow, MLS etc. Also what about trying section 8? Not sure what they call it there, but here we have subsidized housing and it's called section 8. Good luck.

Originally posted by Mark Forest:
Originally posted by @Glenn Gurvitch:

Steve,

Can you try reducing the price by a few dollars. Sometimes we get good luck by dropping the price by a marginal amount so that we get a new set of lookers.

Glenn G.

I was thinking $650, but my wife is reluctant to go there.  

 Steve,

Immediately below your asking rent of $675/month it says Rent Zestimate: $576/month.  Rentometer indicates $500 - {maybe} $550

It looks like you are dancing at the top of the market (20-22% over average).  Drop your rent to $575 - $600 ... still above the market average, but a better chance it will fill and attract a good tenant.

If you are priced above the neighbourhood, you are going to get a disproportionate number of the desperate and unprepared ... neither of whom excel at paying bills and taking care of things.

If you drop your ask by $75 - $100 and find a good tenant versus sticking at $675 and remaining empty for another 1-2 months, it will take you 6-months to recover the lost rent. ... and remember, there is a higher chance your $675 tenant will become a problem by then.

Medium greenapartmenthires 1024x1024Roy N., Louer Louer Ltd. | 1.506.471.4126

$30K all in for $500 rent is OK.  A little on the high side, perhaps, but you should be OK.

The lesson is you need to know the rents going in.  The market sets the rent.  Of everything in the landlord business, that's the one you have the least control over.

Jon Holdman, Flying Phoenix LLC

Im not sure if you've used Craigslist yet, but if I was in the market of renting a house that would be the first place Id check out.

Also, I would lower the rent and allow  tenants to sign a 6 month lease. Hopefully for you, the tenants will move out in the summer time and you can raise the rents and find new tenants to move in during ideal moving season. If you keep the rent at what it is now and only allow 12 months leases I have a feeling that youll be in the same situation next  year

Also, run a "weekend special" and drop the price by $75, see if you get calls. At least, you know.

Truely trying get above market rent can be a losing proposition.  Months of no cashflow will be hard to make up.  When buying you should already know what the market rents for the type of rental you are buying.  Market rents is what the typical renter is willing to pay. Any amount above average thin your potential rental market. Not understanding your customer base can be very unprofitable.  

I update rentals to above market conditions and charge for it.  I set a price around $100 above market rates for the neighborhood.  If I get no responses in the first week, I'll drop it $25 dollars.  Usually, that's when it picks up.  Right now, it's the beginning of the month.  So, people are tire kicking, looking, and planning.  Usually, the second half of the month the serious people come out to play.  

@Steve Might , is it normal in your area to not supply the kitchen appliances with a rental?  Just curious why you wouldn't include them and then tell your renter that they can negotiate a price for them.  That would be a turn-off for me as a renter.  But, if that is what everyone does in your area--go for it.  . I'm just trying to get a better feel for your market.

 I also agree with @Marcia Maynard , remove the coverings from the windows.  I would either put up an actual window covering or leave them completely open.  It will help make it look more finished.

Good Luck with your rental, hope it rents soon!

Every month that the house is vacant, you are losing money (lost rent, property taxes, utility bills you have to pay, lawn maintenance, snow removal, etc. all coming out of your pocket).  Just drop the price to get a tenant in the house.  Then you can gradually raise the rents each year.

Keep in mind one thing: 1 month of vacancy will wipe out your $50/mo extra you're trying to get. I always price my rentals in the low 25% of the market. Why? Because I prefer to have 20 apps over the weekend and select a GREAT tenant than have 2 apps with people that I really don't want to be my tenants.

As others mentioned the price looks high.  What really matters is what the market dictates for rents, not how much you paid.

Is not including appliance typical?

One strategy might be to drastically drop the rent but offer the rate for a 2 year lease.  Even at 500/month with 50% expenses you are getting 10% return with some of that being tax-deferred due to depreciation.

All good suggestions... I would only add a caution not to lower your qualification standards because of lack of interest. The most important rule of being a landlord is tenant screening and selection. I would suggest that you get a great tenant at a little lower rent than a lousy one at full price.

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