Hi All:
I am new to Bigger Pockets. My husband and I placed a contract on a short sale (investment property) in August expecting it to take at least 6 months, but the process moved quicker than expected and we are closing next week. House needs some work (mainly cosmetic) and we are concerned about being able to find tenants this time of the year. Have you all found this to be an issue in your rentals? Home is in Prince William County, Virginia (Washington DC suburbs)near Fort Belvoir if that helps.
I would begin marketing the property now. There's a lot of tire kickers that plan their moves months in advance. Have you considered section 8 renting?
I'm currently building my own procedure manual for my own procedure manual for my rental business. Below, is a rough, unpolished part of the marketing and leasing procedure. Take it for what it's worth, but hopefully it will help.
1. Determine desired / likely tenant (s8, market, student, etc)
2. If s8, list vacant home on housing authority's list, which is distributed only to section 8 eligible prospects. Consider using social serve.com's free vacancy listings. The downside is the large number of calls from low income very poor credit applicants. They will waste your time.
2b. If looking for market tenants, put a sign in the yard. On the sign, include rent, number of bedrooms, and date available. (Learned by mistake, lots of "how many brs?" Calls. Other free listing sites are out there, craigslist, etc. I have had some extremely crappy apps come in from cl...as in 5 evictions in the last 2-4 years.
2c. Mention to tenants and other landlords that you'll pay $100 for a tenant that moves in. Oddly enough, this has been really good for me in the last 12 months. People on section 8 hang out with like minded folks. CAUTION: Be careful to not let your long term, trashed the home in 3 months section 8 tenants know you have a nice unit ready for them to move in blow up. I have a trashy tenant always asking if I have one open, she wants a nice unit, now that she's wrecked hers. My safest response is that "I may have something coming up, not sure if they will renew."
3. Incoming Leads
A. Use a line other than your own. Kall8, a cheap 800 number works, google voice is good too.
4. Lead handling: Return all inquiries from desirable tenants within 48 hours.
4a. Have a script ready to prescreen and filter out the duds.
4b. Have a prearranged time set to show the home. Tell prospect the home will be open from 2-3pm for showings.
4c. Press for deposit, application fee, and/or landlord packet (section 8) if tenant seems desirable.
5. Upon receipt of partial deposit (nonrefundable holding fee) tenant shall sign:
-Lease(s) all 3 if section 8
-Landlord Packet
-Holding fee form
-Agreement to pay remaining deposit
-Any other leasing incentive agreements
1. Determine likely tenant.
2. Market according to perspective tenants.
2a. Section 8 list and / or sign in yard
2b. Online resources
2c. Seek tenant or peer referrals
3a. Set up alternate phone/answering service
3b. Set up a web site with an online application
4a. Develop a script for handling incoming leads.
4.
Leasing packet:
1. Application
2. Lease
3. Landlord packet (if section 8)
4. LBP Pamphlet
5. LBP reciept form
6. Reservation fee form
7. Property Incentive form
8. Property inspection form
Michael, I agree with you on paint color. I do a two-tone with semi-gloss white trim. I think it makes a big difference but I don't have any real low-end properties. I use the same two colors and have the formula so that I can touch-up where needed and not have to re-paint the whole place. I really hate white and I think many will take "designer colors", all things being equal. It's like many things; what was the norm 10 or 15yrs ago is sub-par now.
As to the topic at hand (winter rentals), I closed Nov. 15th and had a December tenant within days. I lucked out. My new tenants (moving in 12/4) were renting a place that is undergoing foreclosure. They had been there 6 yrs and had just renovated the master bath on their own dime. They are also bringing their stainless appliances which are 2 yrs old.
My place didn't look too bad while the short seller was there...but now all the warts are visible. I'm doing more work than I expected.
Bottom line; I think more people "have" to move quickly these days, but it is still not a spring or summer market. I got my tenants off Craigs List and posted no pictures.
Hi Michael and Cheryl,
Let me clarify for everyone when I say white. This means an off tone white color that is not a winter white but more of a taupe color. Cheryl when you say two-tone I am assuming that is in select places and properties. While all of you'll are saying you have a different class of properties, please don't assume. I have found that the higher the class of property the more you will want to keep a neutral color because those tenants are very definitive in what they want.
Also guys and gals, don't assume classes of tenants. Number one it is illegal to do so and number two you are missing the point. Use whatever color you want light blue, two-tone, etc...
PAINTING IS EXPENSIVE. The original poster said she let the tenant choose the paint colors for the children's room etc. My point to her is never go outside of YOUR standard colors which should be as neutral as possible, pastel colors are fine Michael, light blue, green and pink hints in white paint are barely noticeable sometimes. But a two-tone is very much so.
The reason I say this is because some state laws require you to paint each time a new tenant rents a property and painting over some colors are not easy. Additionally, letting a tenant choose a paint color starts down a whole additional path, such as the thing where Cheryl said her new tenant renovated the foreclosure bathroom. I would not rent to that tenant. I find something very interesting about them and would be very suspect. You have to set a tone for tenants from the beginning and allowing them to choose paint colors and hearing and accepting their stories of updating/renovating a bathroom of a property they don't own is crossing a barrier that will only lead to disaster in the long run.
I would not consider renting with section8. This would encourage the worse type of tenants such as drug dealers and prostitutes. In addition, these type of tenants would run down your units.
I would contact the local universities in your area and ask to put up a notice of apartment for rent. I got 3 young college ladies for a 3 bedroom and they all split the rent. I even found that somme of the parents were willing to assist with their share of the rental as per the rent checks that came to me. They were very good tenants and every year, one of the tenants graduates and moves on, but they still keep the apartment.
You do know that you can still screen section 8 tenants and do not have to accept just anyone. I have yet to have a section 8 tenant tear a place up. They don't want to get kicked out of the program.
I had a tenant that on move in day asked if they could paint the apartment camouflage green. :mrgreen:
I told them as long as they gave me the money up front to paint it back they could do it. They never did.
I used Rentals.com (not rent.com) and added the featured for them to push it out to 20 additional websites. plus they use Postlets which gives you their format to add to Craigslist (at not additional charge) which makes it really stand out and had great results.
Also depends on the price point of your property. My homes are just a bit over mid point for my area so I don't use signs on telephone poles as this wouldn't attract the right kind of tenant. I'm a realtor as well and have tested listing the last 3 homes. I didn't get much success (I always ask the tenant where they saw the ad) with listing it. Agents won't bother with it because they get little to no commission. Plus most renters don't look on MLS sites.
Newspapers are a waste even their websites (this coming from a former newspaper adv exec).
Use as many photos as possible once completed. Ad studies show the more photos the more "eyeballs" you'll get. If you have really nice home use your iPhone and upload a video. You'll really get tons of views.
Also, good to Zillow.com and Trulia.com and "claim" your address. This is free advertising and I was surprised at the number of people that search here for rentals.
Good luck
Tamara, if youu se the postlets html code to paste into craigslist, make sure the ad is actually visible. A common problem is "ghost" postings, where you get confirmation from CL that your ad is posted, but that it's not actually visible or searchable. They have a policy prohibiting code from sites like postlets. I have subsequently posted postlets code successfully, so I'm not sure if that's still their policy, but if your ads aren't visible, that could be the reason.
I take the postlets HTML, paste into notepad, strip out the postlets references from the code, and then save the code in notepad. Then I make several different versions (change the title of the ad and the first line) so that I can post every two days without getting flagged for duplicate posts. Then I have 4 versions already to post into CL, and I can have an assistant do it.
It takes some basic HTML skill, not much, so a techie student or friend can usually do it for you.
Thanks, Ann. As it turns out, I was having that problem with Craigslist and couldn't figure out why the ad wouldn't show up. Appreciate your advice.
Kevin: I posted an ad on rentals.com before and got no response. In the past I have gotten the most inquiries from Hotpads, the MLS and Military by Owner. In fact, I just did a search of the rentals.com site for the area my rental is located in, and the only thing that came up was apartment buildings. Maybe it depends on the area your rentals are located in. I agree with you on the newspapers--I have posted an ad in the Washington Post and got 0 inquiries.
George R.: My husband was the one who agreed to the custom paint colors for the kids bedrooms. Although I probably wouldn't agree to that in the future, it seemed to build some goodwill with the tenants, who had just lost their home in a shortsale. The kids were uprooted from their friends and school and choosing the color of their rooms seemed to help with the transition. Tenants were very greatful to us and have been excellent so far in the 1+ years we have been renting to them.
Thanks to everyone re. their advice and suggestions.
i am in the same boat..
purchased a house in early sept. took 2 months to finish it (almost november). wifey did not want to start showing it until it was completely clean and done. so, the ad did not go out until it was done.
so far, just a few calls, no visits at all. it has been on craigslist every day. I have pictures, but no visitors. Have a sign in the yard (2-3 calls).
currently asking $1175 for 3 bed/1 bath, but will lower the price soon. Even though there isn't snow, i think people are either not looking right now or the price is too high.
I was able to get a tenant in my first rental at the very end of October. I went by to install a mailbox (totally forgot to install it during the rehab!) and used the oppertunity to go inside and touch up some scratches they put in the wood trim while they were moving in. They had all there stuff in, the new HVAC system had the house all warm and cozy, tortillas sitting on the stove top, everything very nice, neat and clean. Drove by a couple more times later and they've installed a little paver walkway across the yard from the gate. Hopefully they have next months rent ready by Thurday! Will be sending text message with friendly reminder today.
I would say that this is your issue, since you said that you did get a few calls. Calls that lead to no showings indicate some kind of problem. Could be location (unless call comes from a sign located at the property); could be price; could be size of the house (too many or too few bedrooms or baths) - so ask them what they are looking for in beds and baths, and what their budget is. That way you can identify what you should change, if anything.
Hi All:
I wanted to provide an update on this since I got a lot of replies and great advice. A realtor friend of mine suggested I not advertise the property for rent until around the first of the year, since there is so little activity around the holidays. That way it would appear to be a "fresh" listing. We ended up taking her advice and completing the work around December 19, then we put out ads on Craigslist, Military by Owner, and the MLS (zillow, trulia, etc.) with lots of pictures of the newly renovated property (turned out looking great) beginning on December 30. We also put out a sign in the yard—though the property is located on a quiet cul-de-sac at the very back of the community and doesn't get too much exposure to traffic. HOA only allows a sign on the property, so we couldn't put them elsewhere in the community. I also put a box on the sign with flyers advertising the property's price and features.
Surprisingly, most of the calls I got were from the sign (even though it was hard to see)—though most of those lost interest when I told them the price. We also decided to do a couple of Open Houses since we live 20 miles away, and for those we put signs up all over the community leading out to the main road (also put news of the open houses on our ads). Sunday between 1-4 turned out to be the best time for the Open Houses. We got lots of interested traffic using this method (more so than our ads), and ended up renting to a young couple who was living in the community with the wife’s parents. If it wasn’t for the Open House signs they never would have known about it.
The couple was interested in staying around for at least 5 years (for the school), so they signed a 5-year lease with built in 3% a year increases in exchange for a lower starting rent. Yes, I know some think anything more than month to month is insane and will scold me, but we felt pretty comfortable with them and their well-to-do parents cosigned and agreed to help them pay part of the rent. I would recommend doing Open Houses as an effective way to market your properties. We also liked that it was “casual,” and it allowed more time really talk to potential tenants in a way that didn’t sound like the Spanish Inquisition. I noticed they were more at ease and more likely to be themselves in this environment, so it allowed us to get to know them and judge their character. And of course we did the regular screening stuff as well. Lease was signed on January 20, so our property didn’t sit around all winter like I feared.
Thanks for all your great advice and suggestions.
Sounds like the approach in this next link could have helped for this:
http://www.biggerpockets.com/forums/312/topics/44534-creative-ideas-to-sell-home?page=1#p225945