I bought a decent townhome in Louisville, CO in January first week. It is a 3 bedroom townhome in a great neighbourhood. I put it in market after a few minor repairs. After the first week of low interest, I reduced the price to below market rate - such that mine is the lowest priced 3 bed home available in the whole Louisville-Boulder area. I require a minimum income of 2.5 time rent, a credit score of 620 or greater, and clear background checks. I had lots of interest after I reduced the price 3 weeks ago - about 50 enquiries, 17 showing and 1 application which was rejected due to job issues. I am really surprised why it takes such a long time to rent my house. I notice that my competitions are also just sitting in the market. Is it just because of the cold season ? Any clues Denver gurus ?
@Navin Naik 17 showings and only 1 ap. Bottom line is your are still over priced but figuring out why is important. There might be non-price issues that could be addressed and still keep the price. Check those out first before you lower it again. One of the main things that turns folks off on the property is smell (often overlooked by guys). Think pets, musty/damp (especially a problem with vacant properties where you might be keeping the heat down to save on costs), cooking, or the place feels cold (whenever you do a showing the place must be warm (72-74) IMO). There are other quirks such as carpet, paint colors, or the person showing the property. Get a disinterested 3rd party female to view the property and give an honest, no holds barred feed back to cover the the non-price issues. Take a hard look at your approach to prospects. Some times when we want to get a place rented we come off as needy or desperate which is a huge turn-off. Some times we do the hard sell which also turns folks away. Sometimes we are too cavalier and people don't think we will address their needs as tenants.
Finally, in my experience 50 inquires is low but 17 showings is high. Where are you advertising? You should be on Zillow (including all their affiliates) and probably Craig's List as well. Are you prescreening people who want to see it? Pre-screening helps cut down on showings where the people walk up to the front door and say "Oh it's a townhouse, we are looking for a single family home" Many people don't read the whole ad so if you don't pre-screen, you get people showing up who aren't really looking for what you have or won't qualify for your standards. Would the job issue you mentioned have come out via a quick pre-screening inquiry? Perhaps not but think about your time as well. A word of caution about pre-screening, don't go overboard as it's a turn-off to be grilled but be friendly and casual. I have found if I ask permission to ask the questions it goes far better by phone.
Hope this helps.
Are you trying to compare rents on a townhome with SFRs? I don't think that's a good comparison. How does your rent compare to similar townhomes? Or apartments? With 50 calls and 17 showings I would have expected a tenant. What's the feedback from the showings? I ask people "what else are you looking at"? Or, "what don't you like about this property?"
Is there anything you are failing to mention in the listing that people find out when they get there and it turns them away? Maybe you don’t mention if there is or isn’t a garage? Laundry? Pets allowed? Follow up with a few people who viewed it and ask them why they didn’t want to apply. Ask new people viewing it what it would take to get them to sign a lease. If they say they would rent it for $25/mo cheaper, compare that to your vacancy cost. Some tenants don’t realize they do have some negotiating room and they’re too afraid to ask. Are you managing the unit yourself? I've personally found that tenants respond favorably when you tell them that you are the owner and manager and that you'll be handling maintenance calls, etc. They like to know they won't be passed off to someone who they don't think will address their needs once they move in.
@Bill S. I advertise on Zillow affiliates and craigslist. Also on realtor.com. Plus a rental sign. I think smell is not an issue since I had the duct system cleaned and it smells nice. Carpets are a bit old, but serviceable. Fresh paint. Another thing that might be affecting is that my row of townhomes have backyard facing a busy road - although fenced off. My pre-screening is basically asking them whether they meet my requirements. So I do get a lot of qualified persons. Good advice to get a third party opinion. I do see that my call volume has increased significantly in the past week. Hope spring is finally here. @Jon Holdman I am comparing my price with other townhomes in Louisville/Boulder area. Do you have any experience asking for feedback ? In my experience most don't even bother to get back after showing.
You have to ask them while they are looking. I ask "what else are you looking at?" or "what are you seeing out there?". You want to try to get them to give you there objections to your place. You could also ask "what's keeping you from renting this place?" I always have applications and pens handy and try to get people to fill one out on the spot.
Townhomes, especially a three bed, are a bit of an odd duck. That's bigger than most apartments, but its more like an apartment than a house. So you're competing against apartments more than houses.
You cannot compare to Boulder prices. Boulder always commands a significant premium and you will not get that premium in Louisville. If you're trying to get a Boulder price in Louisville that's your problem. You can only compare to Louisville and surrounding communities (Superior, Layfayette.)
There's also tons of new apartment inventory coming online. So if you're comparing your property to brand new Class A apartments then you're overpricing, too.
The busy street will make a difference, though less of an issue for rent than it is for the purchase price.
This showed up because I have an alert for Louisville, KY. Wrong state but I would imagine you get them same seasonality impact I do here. I have had good properties site for twice as long because people dont want to move in the winter. I actually structure my leases to avoid vacancies in the coldest months but adding or subtracting a month.
@Jon Holdman Good tips on asking for feedback. It never occured to me. My home is priced lowest even if I include Lafayette or Superior. And my price comparison is with similar age townhomes. Because this property has 3 bedrooms ( + 3 bath, 2 office rooms), opens to a backyard and still priced much lower than a SFR, I guess I am not competing with apartments. @Dan Close That is what I like to believe :-)
Just an update to my rental situation. Surprisingly the volume of calls increased dramatically last week with many people wanting to apply. I did a trick that appeared to have worked. I set up the showings back-to-back on Thursday evening giving each party only 15 minutes of time. So there were overlaps and the parties felt the pressure of competition. Got two high-quality applicants and secured the lease next day. Even managed to increase the rent by $55! Thanks everyone for your inputs.
Good work. I don't even both with 15 minute intervals. Give everyone the same time.
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