Real Estate Investor · Fenton, MI · Member since 2008 · 946 posts · 153 votes
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:
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
11y
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.
Flint, MI (your larger neighbor city) has shown a rent increase as follows:
3 beds steady Month over Month while up almost 8% compared to Jan of 2014.
Thanks for the post. The city of Flint is a lot like Detroit. It has high crime and high unemployment. It is also heavily dependent on the auto industry. From what other landlords tell me Flint has difficult inspections, high fees, and a court system that is anti-landlord. I can see why rents have to go up there. I just do not want to have my wife go in there to work. It is a rough town.
We can buy used appliances and have them there immediately, but I have found that some people have some or all of their appliances. Then we have to go in there and haul out what they do not need. I am thinking most people do not have a stove so i will probably drop one in.
Real Estate Investor · Los Gatos, CA · Member since 2014 · 226 posts · 89 votes
11y
Yup, I see this anti-landlord terrible policy in other cities across US. No wonder the very same cities see their property values down and abandoned houses and no property taxes coming in because they destroyed the landlords who collected their loss and moved on. Very basic rule I learned in elementary school, a symbiotic relationship means you never kill your host that feeds you. Property taxes feed the local cities. Not sure what they have in mind (if anything) harassing landlords. On one property I have tenant got fined for example for leaving an empty trashcan on house's own driveway for 2 days cus he left for 1 week and trash collected and left empty can back on driveway.
We can buy used appliances and have them there immediately, but I have found that some people have some or all of their appliances. Then we have to go in there and haul out what they do not need. I am thinking most people do not have a stove so i will probably drop one in.
Wow in Michigan no appliances? I have 3 properties and I supplied them all with a stove and fridge and also a vent hood for the stove.
Yup, I see this anti-landlord terrible policy in other cities across US.
I belong to a local landlord group in that county. We actually had the head judge come before our group and apologize to us for the behavior of one judge in particular who ALWAYS favors the tenant. He said this judge is popular with the people (I can see why) so he keeps getting reelected.
I agree with most other replies... it's price >high based on comps. Moreover, it's a 2/1 priced higher than many 3/1s. Ex) there is a fairly nice rehab'd 3/1 rental a few doors down on your street priced at $575 vs your $675, so you're being undercut by a significant margin.
Best advice: find the closest comparable rental property for your 2/1 and price it similarly.
Wow in Michigan no appliances? I have 3 properties and I supplied them all with a stove and fridge and also a vent hood for the stove.
Hi Scott. We do get used appliances on those two stores on John R. Some people tell us they need a stove, but already have a favorite refrigerator. Some think a used refrigerator is unsanitary even though the store I buy it from cleans it up well.
Real Estate Investor · Fenton, MI · Member since 2008 · 946 posts · 153 votes
11y
I do intend to lower the price as recommended here, but everyday I am now getting calls and e-mails inquiring about the house even at $675. It shows really well with those new floors we put in, and it is almost 1000 square feet, which makes it the biggest 2 bed in that neighborhood. My wife and I will have to come up with a lower number so we can end this vacancy.
Wow in Michigan no appliances? I have 3 properties and I supplied them all with a stove and fridge and also a vent hood for the stove.
Hi Scott. We do get used appliances on those two stores on John R. Some people tell us they need a stove, but already have a favorite refrigerator. Some think a used refrigerator is unsanitary even though the store I buy it from cleans it up well.
hahahahaha I hate those people. The kid is just as bad as his dad. In 2 of my properties I just bought new from ABC warehouse. The other had everything in it already.
In this area I think ABC warehouse is by far the best for the prices. I get the standard white Figitaire and they work just fine
Also if you are showing the property it always looks better to have them in place already so people can get a feel of how it will be to live there. That's what they are looking for in the first place.
How can I live here? That's what people ask themselves
Kalamazoo, MI · Member since 2014 · 224 posts · 129 votes
11y
I know here it is much harder to sell or rent a 2 bedroom versus 3+. Investors usually won't touch a 2 bedroom unless it is near the college or can be converted. I made the mistake of buying one once. Never again.
hahahahaha I hate those people. The kid is just as bad as his dad. In 2 of my properties I just bought new from ABC warehouse. The other had everything in it already.
In this area I think ABC warehouse is by far the best for the prices.
I have bought some things at ABC for personal purposes, but it is hard to beat $250 for a good size refrigerator. I have found the older guy who works there willing to give a fair price. They delivered a refrigerator for only $30 extra.
Real Estate Investor · Madison Heights, MI · Member since 2014 · 693 posts · 216 votes
11y
Originally posted by @Account Closed:
I know here it is much harder to sell or rent a 2 bedroom versus 3+. Investors usually won't touch a 2 bedroom unless it is near the college or can be converted. I made the mistake of buying one once. Never again.
My 2 bd rented in 4 days at the very top of the market. Almost 800 a month. It was supposed to be a flip but I went over budget so its now a rental.
But this is a unique type of house with a huge yard for it being in a city. I played to the yard and put a nice big deck on it.
I really like this house so I think I will keep it
I do agree I will not be looking for a 2 bd anytime soon.
Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes
11y
So if I am a renter, this is what I see:
Over market rent;
High securitdeposit, more than nearby houses;
No pets;
No appliances;
No window coverings;
Lousy time of year to move.
Basically it checks basically every possible negative check box. I could see it sitting a very long time unless you change several of the above, probably significantly change.
Raleigh, NC · Member since 2015 · 28 posts · 6 votes
11y
As a renter, I wouldn't give this house a second glance, mainly because there are NO appliances. I saw that you said you can get some, so do it. Drop a fridge and stove in there pronto.
One other thing that I see no one has mentioned: sentence structure. Your ad in Zillow is jammed together, sometimes there are no spaces in between sentences or words...that makes it very difficult to read.
"Winter Move in special $100 off first month rent if lease signed by Feb 28.Updated floor plan in this well maintained, clean, 2 bed 912 Sq ft. home in Burton.Bendle schoolsWith newer flooring, cabinetry, plumbing and heating. Fresh Paint.Located on quiet family neighborhood street with freeway access near main streets and shopping areas. Living room opens to large eat in kitchen and dining area.Plus large front and back decks for entertaining.Main bedroom is 11x13 with large closet.Spaciousbathroom with plenty of linen and clothing storage. Driveway and large oversized shed.Laundry storage with Washer/Dryer hookup . Negotiable appliance package.High Efficiency Furnace saves on heating costsNO pets Rent $6501 /1/2 month security deposit."
Augusta, GA · Member since 2014 · 20 posts · 19 votes
11y
You are in a tough spot here, and the honest perhaps harsh truth (as others have mentioned) is that you are very overpriced for the area. Also as mentioned earlier in the thread, how soon you want to pay it off has absolutely no effect on what you need to do to rent this house.
Did you pay cash for this house or is there any sort of financing that you have to pay back? Rightn now if your investment is just $30k cash then you are looking at getting it paid back in 5-6 years with $500 a month rent. Prices could go up and you could pay it off quicker but right now you just need to start renting
Looking around your area, you have a house down the street and around the corner thats 300 sq ft larger and $200 cheaper in rent. Right next door to it there is a house the same size as yours, also newly renovated, with more bedrooms thats also $200 cheaper than yours. A couple streets over there is one 200 sq ft bigger and $100 cheaper per month. Of those, your ad is the best laid out and with the best pictures, but at the end of the day no one is paying for pictures.
Your market is also saturated with rentals, you have dozens of rentals all within your immediate neighborhood and its not the kind of neighborhood where upgrades will get you extra money. Most of the rentals are lower prices and the majority have some sort of move in special as well.
If you want to get this rented you need to put in at least a stove and I would reccomend a dishwasher as well if the hook ups are there. I have not seen rentals before without those two being standard. As far as a fridge you could make an offer to either provide the fridge or take $100 off the first months rent, I think that would be good incentive for someone with a fridge already and make someone without a fridge feel more comfortable by not having to pay for one. On top of that, I think your price needs to be around $500, I realize this means putting more money in before you get money back, but looking at the neighborhood, your price is just too high. You wont get this paid back in 2 years with $500 a month but it will be paid back eventually and after that its still profit. So its not a bad investment just not as quick a return as you and your wife hoped.