I have a rental property in South KC that has been vacant for four months now. The property went vacant in October 2017 and is still not rented. I understand that winter months are not ideal times to get a property rented, but isn't four months way too long?
There have been some errors between the PM and leasing agent...
I have had a lot of success in my local market (Milwaukee). I've built a great team (realtor, construction workers, and a great PM). I am debating if I should do one of the following...
- Sell the KC rental and apply those funds to my local market
- Hire a new PM
- Wait it out till Spring
Your price is too high, simply put. 4 months is too long for anything to sit vacant. The market dictates what the going rate should be. I would check Rentometer.com to validate going rates. Call some neighboring listings and see what they are going for and how long they've been available, pretend to be a renter.
Move someone in and do a six month lease so you can schedule the turnover in the summer going forward.
First question you have to answer is why is it sitting vacant? Rent too high? too high for area....too high for condition of property?
PM issues?..... bad advertisements? bad tenant qualifications? not a good salesman for the unit?
Time of year is likely part of it....but not all of it.....
In most cases its better to rent at lower rate than have it sit vacant for an extended period..... drop the rate.....offer 1 month free....open up your tenant requirements etc etc
For me....if I can do well locally, then I would try and unload it and re-invest as close to home as possible. If I don't have to invest far away to get good returns, Id rather do it close to home. But what's the selling market now? better than the rental market?
@William S. Hey William good job on taking actions and bravo on on investing out of state that takes balls lol! With that being said I hope you have a management company or boots on the ground that you trust with your life and more importantly your money. There are so many different issues that could be happening so I will do my best to name the ones I can think of and hopefully it helps. Your PM and/or agent may not care about it and aren't trying to lease it or rent it out, I've seen this plenty of times even within my own company where they don't care about one small duplex because they are worried about leasing in a huge 100 unit apartment that will give them more money. Many PM companies are filled with people that come in at 9 and clock out at 5, they don't care about your property, tenants or problems, they will do the bare minimum to get stuff done and say they are trying or working on it when they aren't. This is why investing out of state is VERY RISKY unless you have someone you trust 200%. You may also be ignorant to the fact of how the property actually looks vs how it looks online or in ads. I've seen this quite a bit with California investors who ask us to manage for them, and are wondering why their units aren't renting out and then I go look at it and looks nothing like the ads. The carpet is dirty, the walls have scratches on them, paint is chipping and a million other things are wrong with it. It's no wonder no one wants to rent it out after seeing what they are seeing when they are shown the property. Your pricing may also be too high for the area, or you may not even be in a desirable area. I would suggest taking the time to fly out and spend the 600$ to see the property, see the community and really get a feel for the environment. This 600-1000 can potentially save you tens of thousands down the road in a bad deal. This way you understand the market and what you are getting into and can see problems or future problems that may occur. I would also suggest implementing Skype or some sort of video calls with your manager and have them walk you through the property so you can take a look at it at least once a month. One of our investors from Chicago has us do this with him and I can say his properties fair much better, because of him always being in the loop and it holds us that much more accountable. Good luck and keep working hard don't let this hold you down! Trust your gut and do what you think is right.
@William S. 4 months is too long. Your property manager is terrible. I have a rental in South Kc and i just rented it. I was involved in the process because I wanted to see what kind of response I would get at a rent of 825.0. I had inquiries but no real applicants. I dropped it to 800 per month and had applicants and choose one. You can pm me and I will tell you the address of my rental and size to compare it to your asking price on rent. It took me 7 weeks to fill the vacancy. It was only vacant because it was updated.
Market rents are $950-$1,000 for this property type. My rental rate is $975/m, but we dropped it to $950/m a month ago.
I flew out to visit the property recently and wasn't pleased with the turn over job that occurred.
I think a few things are at play
1. Time of year
3. Leasing agent
As I said. My team is better in Milwaukee, even though the market isn't as good as KC.
Prices have gone up in the area. If I were to sell I would most likely break even or lose a few grand. However, deploying the funds to Milwaukee is a better long term solution.
@Ned J. raises some really good questions. I personally would start looking for a new property manager/leasing agent, regardless of the time of year, a property shouldn't sit vacant for 4+ months. I honestly wouldn't sell if you are getting a good ROI. Go interview a few new PM companies for this property.
Is the property near Wornall & 132nd St? I noticed that there is a unit down the street from mine renting for 950. Would love to compare notes if yours happens to be this unit.
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