Not able to find tenant for almost 2 months in Colorado Springs
Member since 2019 · 8 posts · 2 votes
I'm owning a 4 plex in Colorado Springs (CO 80906), that's my first investment property and I'm located outside of CO state. There was a tenant eviction before Christmas time in one of my properties. After that, my PM spent time in cleaning the property and listed the property around early/mid Jan. It's a 2 bed in 4 plex, the current list price is $850. The price had been lower down since the beginning.
Since then, there were a few showings to the unit but none of them became a real inquiry. What should be my next step? I'm thinking about upgrading, but it will take a long time and I can't guarantee that this will attract more interests.
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See agents@Meridith Om so I would echo what others have said mostly.
1) Few showings means bad pictures or no advertising or both. That is assuming that you mean people calling to request a showing are "showings". If there are lots of calls but few turn into showings then it's your PM's screening process or your PM's ads are attracting low quality callers (that can be because of bad pictures of a good unit or good or bad pictures of a bad unit). Get an objective 3rd party to review your advertising.
2) Why do you say that upgrading won't attract more interests? Nice properties always attract more interest than the same priced properties without upgrades provided they are advertised the same means.
3) Secret shop the PM. Have a friend call and go through the process with them. See what the friend's experience is. If it's anything but easy, it's your PM that is the problem.
4) Along the lines of item 1) above. Is the property listed on Zillow? If so, post the link here and people can give you feedback.
How are you advertising your rental? You may want to expand the marketing of the unit. Also, winter months are slower in some markets.
I have several Colorado Springs rentals, January-March is rough. When I have put others up for rent in Spring or summer I have qualified tenants ready to move in within days, sometimes before renovations are complete! One unit was trashed (we just purchased the property) and the tenant put down a deposit based off flooring and tile samples. That said, I had a 4bed/2bath that took me over a month (just got it rented) It is updated and in a trendy area. I had to do a price drop, and would be getting $75-100/mo more in the summer. It was dead. You may need to drop the price, AND I would ask for a lease that ends May-August.
Renters are picky, and expect updated units, no nasty carpet, or dirty looking units, plus you will get a better quality tenant. Do you have nice pictures online? How do your units compare to others in the area? Who is your target?
Yikes...I'm concerned about several things:
What is the market rent there? If it's higher than $850, increase your price. You can always lower it for the right tenant but it doesn't sound like the lack of showings is due to the price. When the rent is below market price, it gives a perception that something is "off."
Why isn't it renting? Is it hard to schedule a showing? Are callers being turned off by a list of requirements - versus being told how convenient/great the property is?
Is it advertised for rent on the online rental sites (owners list for free)? If not, please do this - and list your contact information. At this point, something isn't working and you may need to gauge interest yourself. If it is listed, you may want to change it. And, there are several military bases there...are you targeting that market?
PM versus Realtor. Some PMs are good at it all. Some are better at the management side than at marketing. It may be time to bring in a realtor - maybe one who caters to military families - to market it.
Fingers crossed for you...
@Meridith Om so I would echo what others have said mostly.
1) Few showings means bad pictures or no advertising or both. That is assuming that you mean people calling to request a showing are "showings". If there are lots of calls but few turn into showings then it's your PM's screening process or your PM's ads are attracting low quality callers (that can be because of bad pictures of a good unit or good or bad pictures of a bad unit). Get an objective 3rd party to review your advertising.
2) Why do you say that upgrading won't attract more interests? Nice properties always attract more interest than the same priced properties without upgrades provided they are advertised the same means.
3) Secret shop the PM. Have a friend call and go through the process with them. See what the friend's experience is. If it's anything but easy, it's your PM that is the problem.
4) Along the lines of item 1) above. Is the property listed on Zillow? If so, post the link here and people can give you feedback.
Thanks for all the insights! That's super helpful. My Unit is here:
https://www.zillow.com/homedetails/1712-Hampton-S-...
Another newbie question is- how to find a realtor that would like to help rent the property? Also, how should I compensate the realtor? Any recommendations?
@Meridith Om so I would echo what others have said mostly.
1) Few showings means bad pictures or no advertising or both. That is assuming that you mean people calling to request a showing are "showings". If there are lots of calls but few turn into showings then it's your PM's screening process or your PM's ads are attracting low quality callers (that can be because of bad pictures of a good unit or good or bad pictures of a bad unit). Get an objective 3rd party to review your advertising.
2) Why do you say that upgrading won't attract more interests? Nice properties always attract more interest than the same priced properties without upgrades provided they are advertised the same means.
3) Secret shop the PM. Have a friend call and go through the process with them. See what the friend's experience is. If it's anything but easy, it's your PM that is the problem.
4) Along the lines of item 1) above. Is the property listed on Zillow? If so, post the link here and people can give you feedback.
My Unit is here:
https://www.zillow.com/homedetails/1712-Hampton-S-...
Another newbie question is- how to find a realtor that would like to help rent the property? Also, how should I compensate the realtor? Any recommendations? Thank you!
Yikes...I'm concerned about several things:
What is the market rent there? If it's higher than $850, increase your price. You can always lower it for the right tenant but it doesn't sound like the lack of showings is due to the price. When the rent is below market price, it gives a perception that something is "off."
Why isn't it renting? Is it hard to schedule a showing? Are callers being turned off by a list of requirements - versus being told how convenient/great the property is?
Is it advertised for rent on the online rental sites (owners list for free)? If not, please do this - and list your contact information. At this point, something isn't working and you may need to gauge interest yourself. If it is listed, you may want to change it. And, there are several military bases there...are you targeting that market?
PM versus Realtor. Some PMs are good at it all. Some are better at the management side than at marketing. It may be time to bring in a realtor - maybe one who caters to military families - to market it.
Fingers crossed for you...
Thank you for all the suggestions! :)
Here is my take:
It might be time for updates, new LVP flooring throughout (you should be able to get decent quality LVP for about $4/ft installed), online the carpet looks stained, and the edges of the linoleum in the kitchen and bath look grimy; having a patch of carpet in the living room makes the place look smaller. Paint the cabinets a solid color that coordinates with the counters (which look new) and replace the missing drawer, add cheap cabinet hardware, a microwave/hood combo and do a tile shower surround or replace the surround with one that isn't so drab. The white trim and baseboard look like they need to be cleaned or painted. For about $5K in updates you should be able to rent quicker, and get a better class of tenant, and the updates should last 5 years or more.
The door to the laundry should be closed in the picture of the living room, then a separate pic of the washer dryer.
While it isn't always accurate Rentometer says average in the .5 radius for the last 6 months for a 2-bed average over $900.
@Meridith Om - this is really surprising to hear! I'm a local agent (I do not do property management except on my own rentals) and our population is exploding. I get calls every day from people desperate for a rental. I looked in the MLS and similar properties (2/1) have rented recently from $795 to $900. Your property isn't listed in the MLS. You asked about how to find an agent to help you - to be a property manager in Colorado you have to be a licensed Realtor so you currently have an agent. I'm not sure why your agent/pm didn't put it in the MLS, but you might check. You are close to Carson so should attract military. I can recommend a bulldog licensed Realtor/property manager for you but you are likely in a contract with your current PM so would need to read the terms of your agreement. If you'd like a referral, please contact me.
I just looked at the Zillow ad. I don't know who took the pix, but they don't show the property very well. They were maybe taken with just a cellphone, and the phone was not even held sideways. So the rooms all look super small. And the last exterior picture doesn't really do you any favors either.
Also, requiring a prospective tenant to fill out an on-line application before being contacted to make an appointment might cause a lot of people to just go to the next property in their search results list. I always do some pre-screening before setting up a showing, but requiring completion of an on-line application is probably unrealistic.
So just from this, I would have to say that the problem is most likely with the PM.
@Meridith Om
Unfortunately one of the problems is the location of the property. I know this city well and that is one of the areas that I just would not buy in. I think $850 for a 2 bed might be above market. At that price you are competing with a lot of other neighborhoods that are just flat out nicer. Sorry to be the bearer of bad news. However, spending some money to make your property more attractive overall WILL help. Good luck
Hi @Meridith Om, sorry to hear about the current struggle.
Let's start off with some obvious questions:
Hiring a property manager should reduce stresses in your life. And for the most part, the good ones do. Maybe this is a bad PM or it's just tough conditions right now, it happens. What's important is communication between you two. Property managers hate to be hounded but at some point they should expect it; i.e. 3 month vacant unit.
Here are my suggestions for you and your property manager:
I wish you the best of luck, it's an unfortunate situation that every investor fears!
@Meridith Om after reviewing the ad on Zillow. Here are my comments.
1) If you look at your ad, Zillow also offers two other units for rent cheaper than yours if you scroll down on the ad just a bit ($775 and $800) for rents.
2) Pictures look good but there are too few. You need lots more pictures. I assume because there are no exterior pictures that the outside leaves a bit to be desired but based on Google Streets it looks ok. After view Google Streets it seems there is a yard. There is no mention of outside space for this unit. If there is any private or shared space it should be mentioned and there should be pictures of the space.
3) I looked in the area on Zillow and Craig's List. The good news your place is on Craig's List too. Again two units right in the area advertised cheaper than yours. We don't know how many have rented in the time since yours went on the market but I would be there have been some. Seems you are a wee bit overpriced.
4) My suggestion would be this. Get more pictures. Drop the rent to $799 and offer $99 for March rent. Most folks looking now are looking for April 1 so in all likelihood you won't be getting March rent anyway. This at least would get someone else paying utilities. You will still get folks going for the April 1 move-in but they will value the extra time to move casually rather than a mad dash at the end of the month.
5) Stage the property and take lots of pictures of the property staged. It will help you market it for years in the future. If you do plan on doing some rehab then for sure stage after the rehab.
6) There is a date stamp on the first picture from 2011. That should be photoshopped out. People look at it and think nothing has been done to it for 8 years and move on.
7) Next step is to secret shop your PM. See how they handle calls, emails and texts and how hard it is to set a showing. I know the ad says to call but about 75% of my tenants make contact via email and another 10% via text. The younger generation no longer talks on the phone. Does the PM respond to emails and texts from the ads? Calls should be handled by a live person, email and texts should hear back within 5 min during business hours and 1 hour unless between 10 pm and 6 am (those should be responded to by 8:30 am weekends and holidays included). Showings should be done quick (less than 24 hours after contact) and easy (when the applicant wants which is probably after business hours). Anything less is costing you $$$.
Let us know how things turn out or if you have more questions.
The Zillow ad shows that you have lowered the rent from $950 to $925 to $825 over a period of 51 days. Renters are going to see this and think there is something wrong with the place, otherwise someone would have rented it earlier.
Remove the ad and then relist it with the lower price. Your ad is now fresh and says 1 day on Zillow instead of 51 days on Zillow.
The ad also says: In person showings are given to applicants that have completed a FREE online application and meet our minimum qualifications... Why don't you list the minimum qualifications in the ad so I don't have to waste my time filling something out that I won't qualify for?
Here is my take:
It might be time for updates, new LVP flooring throughout (you should be able to get decent quality LVP for about $4/ft installed), online the carpet looks stained, and the edges of the linoleum in the kitchen and bath look grimy; having a patch of carpet in the living room makes the place look smaller. Paint the cabinets a solid color that coordinates with the counters (which look new) and replace the missing drawer, add cheap cabinet hardware, a microwave/hood combo and do a tile shower surround or replace the surround with one that isn't so drab. The white trim and baseboard look like they need to be cleaned or painted. For about $5K in updates you should be able to rent quicker, and get a better class of tenant, and the updates should last 5 years or more.
The door to the laundry should be closed in the picture of the living room, then a separate pic of the washer dryer.
While it isn't always accurate Rentometer says average in the .5 radius for the last 6 months for a 2-bed average over $900.
Thank you @Gretchen Place for the detailed response!
@Meridith Om
Unfortunately one of the problems is the location of the property. I know this city well and that is one of the areas that I just would not buy in. I think $850 for a 2 bed might be above market. At that price you are competing with a lot of other neighborhoods that are just flat out nicer. Sorry to be the bearer of bad news. However, spending some money to make your property more attractive overall WILL help. Good luck
That's a good insight, thanks!
Hi @Meridith Om, sorry to hear about the current struggle.
Let's start off with some obvious questions:
Hiring a property manager should reduce stresses in your life. And for the most part, the good ones do. Maybe this is a bad PM or it's just tough conditions right now, it happens. What's important is communication between you two. Property managers hate to be hounded but at some point they should expect it; i.e. 3 month vacant unit.
Here are my suggestions for you and your property manager:
I wish you the best of luck, it's an unfortunate situation that every investor fears!
Thanks for the insight. I will start to contact outside help and see if that outside help can turn to be a better PM contract.
The Zillow ad shows that you have lowered the rent from $950 to $925 to $825 over a period of 51 days. Renters are going to see this and think there is something wrong with the place, otherwise someone would have rented it earlier.
Remove the ad and then relist it with the lower price. Your ad is now fresh and says 1 day on Zillow instead of 51 days on Zillow.
The ad also says: In person showings are given to applicants that have completed a FREE online application and meet our minimum qualifications... Why don't you list the minimum qualifications in the ad so I don't have to waste my time filling something out that I won't qualify for?
Thanks for the advice @Greg M., I will list it as my next action item.
I have a friend who's house sat vacant for 3 months and I was getting more traction from one Facebook post than his PM was. I let him know that his PM wasn't doing their job. The home wasn't advertised on Zillow which is the biggest real estate platform out there right now. If your PM isn't advertising on Zillow you should have a serious discussion with them.