How do you beat the winter vacancy rules???

Question

Just curious- How do you deal with winter vacancies???

Account Closed · Answer

In the Phoenix area, the winter vacancy problem is more of a "not wanting to move during the holidays" problem.  November and December are the most difficult months to rent.

If I get a winter vacancy, I lower the rent below the competition and make sure the house is clean and move-in ready.  That way, the few renters out there will pick my property over the competition.  I would rather lose $50 or even $100 a month on an $1100 house, rather than have a two month vacancy.

I will also consider six month leases in the winter, as long as I get a little higher rent to compensate for the turnover.  I just did a seven month lease at $1,050 on a house where the asking rent was $995.  These folks could not find anyone else to do a lease for less than a year.  They were honest enough to say they only wanted to rent through the end of May, rather than taking a one year lease and then breaking it.

Frank Adams · Answer

My first rule was to avoid them at (almost) all costs. When I did get one I made sure that my "new" lease ran for 18 months, or whatever it took to get it to expire in the summer.

Beyond that I always made sure the yard looked as good as possible (tougher in some locales than others) that it was well-lighted inside and out and that I had the temp back up to normal and a fire going in the fireplace for every showing.

Frank

Tracey B. · Answer

I believe you all that this phenomenon of "winter vacancies" is real, but I'm a bit confused as to how it exists. Surely there are the same number of people and the same number of dwellings year-round... so occupancy levels must be similar year-round, no? Or do people leave the country, or live with friends/relatives/in shelters, over winter? Where do all the tenants GO?

Brendan O'Brien · Answer

Oh I wish I had an easy answer to this!   Like others I would not have a lease end mid-winter.  But, my midwinter moveouts are usually breaking a lease.

Two ideas that may be useful: 1) if you offer a free month, make it the second month - that way they really have to be able to afford the apartment.  2) I've never tried this, but considering that a big hassle is the inconvenience of moving, how about offering moving assistance?

Will Barnard · Answer

Winter in the cold regions and holidays everywhere, you will find it more difficult to find tenants. Why? Because people do not want to move around the holidays or in the middle of snow storms. It is that simple. There will be some of course who either have no choice, or poor timing, but it will be much more limited. 
Your comment of buying in the winter or holidays, is correct. Sellers can be more desperate at those times and you can pick up a bargain. Then account for a few months vacancy in your projections to cover your bases and use this time as Tim mentioned, to do your fix-ups/rehabs.

Fred Shandler · Answer

Does it become significantly harder to rent in the winter?  I've read a few posts here that stated some of the best purchased deals are found in the winter (less buying competition?).  If you buy in the winter, should one almost expect to have the house vacant for some time?  Or is it simply a matter of advertising the property more aggressively?

Will Barnard · Answer

You guys/gals have it all wrong!

All you need to do is take the two holiday winter months off like our politicians are doing when times get tough. It is as simple as that!

Christian Malesic · Answer

I see why yo do this, Frank.  We have an issue that outweighs this (in our minds).  The politicians around here suck!  These raise taxes, water, sewer, trash, and inspection fees annually.  It is usually to the tune of $15 per unit per year.  Thus, WE NEED the flexibility of increasing rents to keep up with costs.  We always send a list of the city council's phone number or county commissioner's contact info with every increase notice and, as a rule, do not raise rents unless our expenses are raised (which is pretty much annually)

Jeffrey K. · Answer

Mr. Malesic's tip of including city council contact information is a very cleaver move.  I usually make an improvement that I can point to, but this might be another way to keep clients from feeling like surfs.

Christian Malesic · Answer

We have not expereinced what some of you have.  In the winter, our tenants tend to stay put and pay.  Evictions gone down as do moves, so we have less vacancies.

We do have more difficulty filling those vacancies with less showings per available unit; thus, the foot traffic is not there.  We have found this does not necessarily mean we get lower quality tenants.

How do you beat the winter vacancy rules???

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