Suggestions for getting a property rented in saturated market

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Suggestions for getting a property rented in saturated market

Tony Castronovo
Rental Property Investor · Park City, UT · Member since 2016 · 678 posts · 531 votes

I've been sitting on a rental that I listed over 3 weeks ago.  I am getting a few bites but not overwhelming inquiries.  I held a couple open houses and had some positive interest from a few folks.  Normally, this would tell me that I am priced too high.  But I've monitored the area and I feel I am right where I should be.  I am willing to drop the price.  However, I noticed that my competitors have been steadily dropping their prices about $25/50 per week at over 30 days on market.  The area is just saturated with rentals.  And although mine looks awesome with a fresh rehab, many of the others look equally nice.

Should I wait it out?  Drop the price? Offer incentives?

Note: I am not listed in the MLS (I usually don't have to). I am on Zillow, Realtor.com, Trulia, Hot Pads, Doorsteps, and Craigslist. Have also marketed on Facebook. But another option is to list it in MLS (just hate to give up that first month's rent).

Thoughts?

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Dustin Lavender
Investor · searcy, AR · Member since 2016 · 147 posts · 111 votes
9y
I use a website called rentalutions. It syndicates to a bunch of other sites that syndicate to others as well. It is awesome for a single property that you are having trouble with. Paid, you can list multiples with them, or you can do one for free. I rarely put out a yard sign anymore due to the 3 am, Sunday dinner, and calls that go like this "oh hey dawg, this is so and so, saw the sign at your house yo, this place fo rent?" .......me:"Yes it is" ...... "Okay dawg Imma call you back, after I get with my baby momma boyfriend, see its be me, my girl, my baby momma, her brother, and her boyfriend. So Imma let you know." .....dial tone. Five minutes later .... " oh, hey dawg, what's the rent on this house we are super interested!?" ....me, "$750" .... "oh snap dawg, he said 750!, okay yes sir, so we are looking for one in the $500 range." .... me: " this is all I have open now and rent is $750, $550 deposit." .... "okay man, we'll talk about it." .......4 minutes later ...."hey man, so I get paid next Friday not this Friday, and baby momma ain't got a job right now, but we got like $317, and was wondering if you would let us pay it out." .....me:"no sir, we require the full deposit and prorated first months rent to be paid at lease signing." ..."okay dawg, it's all good, I'll let you know" ......2am, 5 missed calls .....2:05am voicemail....."hey dog, I know it getting late, but uh we was all wondering if we could come look at the house we are over here now if you are around... let's us know oh yeah man do you allow pets, cuz we got 3 dogs." Day two, remove and burn yard sign. Good luck buddy
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  • Matthew Olszak
    Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
    9y

    @Tony Castronovo If you feel your price is solid, here are a couple more ideas:

    How do your stated requirements compare to the standard tenant who would rent there, and how does it compare to your competition? IE are you asking for a 720 credit score in a C/D neighborhood which normally rents with cash?

    Are your pictures telling too much? Sometimes its better to leave a little mystery and only show a few photos. That way you draw them in, awe them in person, and make the "sale". If you have too many pictures, applicants may think they've seen everything anyhow and it looks too small or there isn't enough light, so there is no point in scheduling a showing. Same thing goes for your written description.

    You could possibly be just outside of a common search range - sometimes going from $1500 to $1475 (and vice-versa) can work wonders.

    If you have time, take your listing down a couple days, then put it back up 4 or 5 days before a Sunday and advertise an open house. Word it in a way that makes it seem like a line will be out the door, and that you'll have plenty of applications on hand and to bring a copy of their ID and paystubs to submit their application asap.

    If there are a few brokers who do big business with representing tenants on rentals, reach out to them and offer 1/2 month rent if they bring their own tenant, you don't need help with anything else.

    5Reply
  • Paul Bowers
    Real Estate Investor · Macedon, NY · Member since 2016 · 251 posts · 290 votes
    9y

    Whats the monthly rent?

    0Reply
  • Dustin Lavender
    Investor · searcy, AR · Member since 2016 · 147 posts · 111 votes
    9y
    I use a website called rentalutions. It syndicates to a bunch of other sites that syndicate to others as well. It is awesome for a single property that you are having trouble with. Paid, you can list multiples with them, or you can do one for free. I rarely put out a yard sign anymore due to the 3 am, Sunday dinner, and calls that go like this "oh hey dawg, this is so and so, saw the sign at your house yo, this place fo rent?" .......me:"Yes it is" ...... "Okay dawg Imma call you back, after I get with my baby momma boyfriend, see its be me, my girl, my baby momma, her brother, and her boyfriend. So Imma let you know." .....dial tone. Five minutes later .... " oh, hey dawg, what's the rent on this house we are super interested!?" ....me, "$750" .... "oh snap dawg, he said 750!, okay yes sir, so we are looking for one in the $500 range." .... me: " this is all I have open now and rent is $750, $550 deposit." .... "okay man, we'll talk about it." .......4 minutes later ...."hey man, so I get paid next Friday not this Friday, and baby momma ain't got a job right now, but we got like $317, and was wondering if you would let us pay it out." .....me:"no sir, we require the full deposit and prorated first months rent to be paid at lease signing." ..."okay dawg, it's all good, I'll let you know" ......2am, 5 missed calls .....2:05am voicemail....."hey dog, I know it getting late, but uh we was all wondering if we could come look at the house we are over here now if you are around... let's us know oh yeah man do you allow pets, cuz we got 3 dogs." Day two, remove and burn yard sign. Good luck buddy
    6Reply
  • David Dachtera
    Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
    9y

    Hhhmmm... In today's market, it's hard to imagine a rental market being "saturated", though I'm sure it's possible.

    As Matthew suggested, it may be a matter of how your unit stacks up to  the competition. It may also be a matter of how the rent compares to area incomes.

    You didn't say what your unit is - SFR or what. Do you own it outright or is it financed? Are you in a position to offer seller finance? If so, maybe offer for sale OR rent.

    0Reply
  • Michael Lucero
    Rental Property Investor · Pasadena, CA · Member since 2016 · 164 posts · 149 votes
    9y

    Are you interacting with the prospects, maybe something you are doing/saying is turning people off. Is there a property management company or are you telling prople you self manage which can be riskier to a tenant, they may not trust you to fix stuff as quickly. It could also be that the entire market of similar houses is priced too high and you all need to come down which is simple supply/demand economics; are there cheaper options nearby that arent significantly worse than your place, are their enough jobs in the area to support income that fan sufficiently pay your rent prices.

    1Reply
  • Dustin Beam
    Kansas City, MO · Member since 2015 · 609 posts · 321 votes
    9y

    If it's that hard to get someone in, divide your monthly asking rent by 12 and reduce it by that much. (same as letting it sit empty another month before finding someone). Get someone in there now and worry about getting that rent number up next year. Maybe things will heat up by then.

    JMO.

    1Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    9y
    Originally posted by @Dustin Lavender:

    I use a website called rentalutions. It syndicates to a bunch of other sites that syndicate to others as well. It is awesome for a single property that you are having trouble with. Paid, you can list multiples with them, or you can do one for free.

    I rarely put out a yard sign anymore due to the 3 am, Sunday dinner, and calls that go like this "oh hey dawg, this is so and so, saw the sign at your house yo, this place fo rent?" .......me:"Yes it is" ...... "Okay dawg Imma call you back, after I get with my baby momma boyfriend, see its be me, my girl, my baby momma, her brother, and her boyfriend. So Imma let you know." .....dial tone. Five minutes later .... " oh, hey dawg, what's the rent on this house we are super interested!?" ....me, "$750" .... "oh snap dawg, he said 750!, okay yes sir, so we are looking for one in the $500 range." .... me: " this is all I have open now and rent is $750, $550 deposit." .... "okay man, we'll talk about it." .......4 minutes later ...."hey man, so I get paid next Friday not this Friday, and baby momma ain't got a job right now, but we got like $317, and was wondering if you would let us pay it out." .....me:"no sir, we require the full deposit and prorated first months rent to be paid at lease signing." ..."okay dawg, it's all good, I'll let you know" ......2am, 5 missed calls .....2:05am voicemail....."hey dog, I know it getting late, but uh we was all wondering if we could come look at the house we are over here now if you are around... let's us know oh yeah man do you allow pets, cuz we got 3 dogs."

    Day two, remove and burn yard sign.

    Good luck buddy

     LOL. You definitely need to screen your calls! We also rarely put out a sign anymore, but that's because our homes are rented so fast from our online presence that it's a waste of time for the most part and usually generates less serious inquiries. At least in my area, people who know what they want just go online, get it set up, and get it done. 

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  • Tony Castronovo
    OP
    Rental Property Investor · Park City, UT · Member since 2016 · 678 posts · 531 votes
    9y

    Great feedback everyone!  Funny stuff @Dustin Lavender.  :)

    It's a SFH. I am currently priced at $1425. Similar homes in the area are listed between $1350-$1500. Note that the ones listed at $1350 have been reducing...and it doesn't seem like it is helping them. I have thought about going to $1395 to @Matthew Olszak's point (e.g. get into a different search range).  But if it's not working for the competition I am questioning this strategy.

    My criteria isn't super detailed online.  So I don't think it's turning people away...but maybe it's also not allowing me to differentiate my property.  Perhaps I can make this more inviting.

    In 3 weeks I have had probably 10 or so inquiries.  Had a few "no shows" who asked to view the property.  But did show the home to about 4 folks....2 of which said they wanted to fill out the application (but didn't).  I suppose @Michael Lucero could have a point about my "interaction" with these prospects.  However, most of these prospects are looking to move because their current landlord won't fix anything in the "seemingly dumps" they live in now.  Their eyes light up when I tell them about my quarterly maintenance program and my offer to let them get testimonials from other tenants on their experience renting from us (I present myself and the property as being managed professionally by my company....rather than "me" as an individual).

    I also do not put a sign in the yard.  Only put one there when I host showings to help people identify my property. 

    0Reply
  • Deanna McCormick
    Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
    9y

    When things were slow we'd offer 1 month free... and we chose to pro rate the 1 month free over the course of the lease and we made it for 13 month lease term.

    Was a great selling tool and tenants loved the lower prorated monthly rent for that period of time and we weren't out for a entire month without income.

    All in all a quick response in setting up appointments, calling back and friendly is the best tool you have. I also like the limit of photo's in an ad to get them to call, they will want to see more.

    Criteria look at what you have and call and see what  your competition uses,, you don't want to limit your pool. 

    I take offense to a comment about not wanting tenant to know your the landlord and you self manage,, that's the best selling tool you have,, your property should show great a image of your commitment to quality and customer service.  They don't have to go thru a middleman to get their questions answered or maintenance requests handled. 

    2Reply
  • Paul Bowers
    Real Estate Investor · Macedon, NY · Member since 2016 · 251 posts · 290 votes
    9y

    I wouldn't pay a realtor and give up a full month of rent.  You could lower the rent by $118 per month and that's the same as giving up the $1,425.

    0Reply
  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    9y
    Aside from the other suggestions make sure your ad reflects your best selling point in the title and the title is distinctive. You want them to remember to call you ....the red house with huge backyard etc. You seem to be having trouble getting calls and there is a lot for rent so don't get lost in a sea of ads.
    3Reply
  • Bettina F.
    Investor · Post Falls, ID · Member since 2016 · 606 posts · 699 votes
    9y

    Offer one month's free rent (as long as it is not the first month).  Make up a coupon good for December rent, because people always need the extra money at Christmas.  Or offer "We pay your moving costs!"  and make up a coupon good for 1-2 days truck rental at UHaul.  If you do any incentives MARKET THE HECK OUT OF THEM -- incentives are no good if no one knows about them.

    1Reply
  • Dede Christensen
    Property Manager · San Mateo, CA · Member since 2010 · 30 posts · 6 votes
    9y
    I agree with Deanna McCormick. This is a great selling tool, that you are the landlord/owner/manager and there is no middleman. I'm experiencing a saturated market where my investment is, so thanks to everyone for their advice. You have experience- but that's why we are on BP, to get feedback. I expect to get some snarky responses sometimes but thank goodness not on this post, as this is a painful reality for me.
    1Reply
  • Tony Castronovo
    OP
    Rental Property Investor · Park City, UT · Member since 2016 · 678 posts · 531 votes
    9y

    I agree @Dede Christensen that you have to have some tough skin sometimes when posting on BP.  But this thread has been very helpful.  And even though I have some experience now having done this for a few years I really value the fresh perspectives.

    I already implemented @Bettina F.'s idea about "We pay your moving costs!".  My listing is updated and I put a flyer together to bring to showings / open house, etc. 

    I really thought about @Michael Lucero's comment about "interacting with prospects" and after getting a few inquiries today I really thought about how I was responding....AND picked up the phone to make it more personal.  Thanks @Deanna McCormick

    Trying to get better every day...

    1Reply
  • Mike Landry
    Investor · Montgomery, TX · Member since 2014 · 386 posts · 151 votes
    9y
    market statistics show that rents are falling in the Houston area. 6% lower than a year ago. inventory for sales is at the highest level since 2012 at 4.4 months. while prices are still barely going up on average, their rate of increase is decreasing. I think too many people held on to their old house as rentals thinking prices will go up (they have been correct). Now it's making the rental market a little more competitive especially in the nicer suburbs, Katy, the woodlands, ect. Drop the price to avoid vacancy expenses.
    0Reply
  • Steven Crosby
    Decatur, GA · Member since 2016 · 27 posts · 5 votes
    9y

    @Tony, if you feel your price is solid and your requirements are not too stringent,I would Highly recommend that you professionaly stage the house, J Scott , a B.P. member has a book, the book on flipping houses. I'm not pitching for him, or even know him, but this book taught some very good staging tactics I've seen work. Or maybe consider hiring a pro stager. This will give the house a dream home feel to the correct family and will hopefully give your rental the edge it needs to Capture in that market. Good Luck and Happy Investing.              In Community, Steven Crosby

    1Reply
  • Dede Christensen
    Property Manager · San Mateo, CA · Member since 2010 · 30 posts · 6 votes
    9y
    That is what Im planning to do, also. Staging a rental makes sense/ it could just use a few nice pieces to help people visualize their own furniture there.
    0Reply
  • Jodi GauthierBusiness Member
    Real Estate Broker · Houston, TX · Member since 2016 · 87 posts · 47 votes
    9y

    If it is priced accordingly and rehabbed as you stated there is no reason it should be sitting on the market in Katy at that price range.  If that's the case and  you listed on mls 3 weeks ago you would have already had it rented which would be close to offsetting your commission costs correct?  Are you comfortable holding another 1-2 months or even more once school is in session and rental market gets even more stagnant? Is it zoned to kisd or cfisd? What neighborhood? 

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  • Michael Lucero
    Rental Property Investor · Pasadena, CA · Member since 2016 · 164 posts · 149 votes
    9y

    @Tony Castronovo love it, good luck!

    0Reply
  • Matthew Olszak
    Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
    9y

    @Jodi Gauthier How fast do you believe it could rent if listed on the MLS? Maybe @Tony Castronovo you should consider a 1-month listing agreement if her answer is that it'll for sure be gone in a month? Sure its a month of rent, but hopefully you'll get a long-term tenant and that'll be absorbed across 5 years. Some markets are very MLS driven while others are non-existent on the MLS.

    0Reply
  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    9y

    Price has to match the condition of market and building .  Once it gets in the right range, the activity will jump.  

    1Reply
  • Will Stafford
    Attorney, Investor and Real Estate Agent · Houston, TX · Member since 2010 · 30 posts · 24 votes
    9y

    This is Houston. 99% of all SFH traffic, both sales and rental, is coming from HAR/MLS. Not having the property in MLS is what's killing you. Find an agent that will put it up for a small flat fee and offer 1/2 month to whoever brings you a tenant. Do you use an agent to buy all/most of your rentals? If so, ask them if they will list it for free (still offer 1/2 month to tenant agent). They may say yes if you're giving them a lot of sales business.

    2Reply
  • Tony Castronovo
    OP
    Rental Property Investor · Park City, UT · Member since 2016 · 678 posts · 531 votes
    9y

    @Jodi Gauthier This property is actually not in Katy.  It is really more Cypress.  77064.

    @Ian Walsh That was my first instinct.  But how do you explain my competition as I noted.  They have been dropping their price and they are still on the market.  Perhaps we are ALL too high for the existing market.

    @Steven Crosby I am totally open to staging and think it is almost required for flips.  But it never seemed like I could justify the cost for a rental in the sub $1500/mo range.  Maybe if I could go the DIY approach or find a stager who didn't go overboard.  I can reach out to the stager I worked with in the past (I don't do a lot of flips so not as experienced here).

    @Will Stafford I am definitely pro-MLS and support all that agents do (my wife is an agent). So now that I let the cat out of the bag on that I expect some ribbing on why the heck I haven't listed if I only need to give up 50% of one month's rent. Honestly, in hindsight it doesn't seem like a lot of money. But in the past I have never had an issue getting a home rented in less than a couple weeks...just by listing where I list. I feel that tenants in my target market likely are not working with agents and looking on Craigslist, Zillow, etc. on their own. Perhaps I am wrong.

    0Reply
  • Jodi GauthierBusiness Member
    Real Estate Broker · Houston, TX · Member since 2016 · 87 posts · 47 votes
    9y

    @Matthew Olszak @Tony Castronovo  I've had three of my own rentals and two I listed from other investors in that range that leased in less than a month since May. I must have misread and thought it was in Katy though.  Being in Cypress and the neighborhood it is located/school zoned to plays a big factor.  If you'd like to pm me the address I have no problem looking it up and running some quick comps and giving you my honest opinion.

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