Why do you believe this is happening?
Do you have a local mentor that could give you some insight on your property and the local market?
You can turn this around and stay in the game if you truly have the passion and aptitude for the residential rental business. Focus on learning the business and/or find a great property management company to assist you.
Find the ROOT CAUSE of the vacancy issue and focus on resolving it!
- Quality of Unit
- Quality of Neighbors (homes and businesses)
- Location of Neighborhood, Amenities, Transportation, and Employment Opportunities
- Supply and Demand in your area
- Effectiveness of your marketing (Are you reaching the potential renters best suited for this property?)
- Your management style (Make yourself available to field the inquiries. Remember when you interview prospective renters, they are also interviewing you! Initial impressions are key, as well as great follow-through.)
- Your documents, rental agreement, and property rules (These need to comply with the laws of your jurisdiction, professionally presented, and be top notch to serve both you and your tenant well.)
Location+SF+Amenities+Market Demand = Rent (in dollars).
Now think of the right side of that equation as a scale. If you put the place up for rent for $1, you'd have a line of people down the street (100% demand). If you put it up for rent for $1 million, you'd be looking for a very long time to find someone to rent it (maybe never) (0.0001% demand). So you want your rent to fall into the heavy percentage area. I like falling into the 75-95% percentile. The scale climbs quickly but levels off quickly, and falls quickly, such that (hypothetically):
$1 rent = 100% demand, $50 rent = 100% demand, $100 rent = 100% demand, $250 rent = 97% demand, $500 rent = 80% demand, $750 rent = 60% demand, $1000 rent = 30% demand, $1250 rent = 10% demand, $1500 rent = 2% demand, >$1500 rent = <1% demand. [All relative to location+sf+amenities].
If your place is a dump, in the ghetto, with no amenities, what do similar places rent for in your area?
Most of the time, owners with long vacancies are dishonest with themselves about the reality of their unit. They'll call it a solid "B" area when it's a "C-" area; they'll say it has great space for the price, but the rooms are all chopped up and not very usable; they'll say it has great amenities, but those amenities are a 30 year old dishwasher and a central hvac system that groans and clanks when it turns on. ETC.
@Denise Pauzano - are you self managing? Have you spoken to a local property manager? Without knowing the specifics of the deal, it's unfair to give any advice as how you should move forward. I am happy to chat with you about the specifics of your deal if you think it might be of assistance. Best of luck!
Originally posted by @Denise Pauzano :
@Dennis M. Actually no, it’s not “self evident” after 1 month. There are plenty of different reasons a place can stay vacant that may not be realized righy awat. This one has multiple. But thanks for your input.
Ok what are the multiple reasons you mentioned so we can help find a solution to them
The yard is being used as a parking lot.
I've lived in many places around the world and parking on the lawn is always a sign of a low-class property.
You have a large population so the demand exists. You need to fix it up and price it to match your market. One month of vacancy costs you more than reducing the rent 10% and getting it filled. A 6-month vacancy costs more than reducing the rent 60%!
Update: we renovated, it’s beautiful and now more desirable and most importantly, it’s rented!! Thanks for everyone’s advice!
Boy that’s a relief . Sucks when you gotta dump money into something that’s already a money pit but it will be worth it in the end and now you got a nice place that’s marketable