No Applications, Rental Property

Member since 2019 · 8 posts · 2 votes

Hi all,

I recently made the jump to being a landlord and I'm having some trouble getting off the ground with tenants.

As of today, the house has been on the market for 43 days and I've reduced the rent from 2800 to 2500 over the past 30 days. The property is in Oakland, CA.

I have a property manager who does open houses (1hr windows on Saturdays or Sundays) and individual showings however I still don't have any applications for the property.

The property was recently renovated (new appliances, upgraded electrical, windows, landscaping, etc) 3 bedroom - 1 bathroom home but it's in what I think you call a "Class C" neighborhood here (not the worst but also not a war zone).

Because it's been on the market for 1.5 months now, I'm entertaining opening up applications to section 8 tenants (with 3 room vouchers).

I don't want to go much lower than I'm already at ($2500) because I don't want to lose money on the place (mortgage + maintenance + insurance + utilities + etc) but I'm trying to figure out what I need to do to get the place rented.

Do you have any suggestions for how to get the place rented?

Thank you!

1 Reply

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Brian Garlington

Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes

@Steven Groshong

I'm going to give you a news flash straight from Hedes......and a solution. That is a "D" neighborhood. I live just a few blocks from there where I am Househacking a Duplex.

You've already come up with your solution by the way. Advertise it on GoSection8 and you will get between $2,700 to $2,800/mo AND you won't be subject to rent control :-)

Zillow and Rentometer tell you that you should get $2,700 to $2,800/mo....and when I advertised on Zillow and CL I had COUNTLESS people reach out to me through Zillow THAT DID NOT READ THE AD. They see the price for a 3bd and simply call or text. Then when they get to the neighborhood they are put off. Then when I advertised on Go Section8 I had COUNTLESS people reach out that DID read the ad. I have 2 section 8 rentals here in the bay area and 2 in Cleveland by the way in addition to 4 other rentals that are NOT section 8. The good thing about Section 8 is that because the person's rent is subsidized by the government, they are NOT subject to the restrictions of rent control....even in Oakland.

If you're worried about what a potential renter may do....here's what I did when I advertised on GoSection 8......

No Smokers of any kind,....period....no vaping, no marijuana, no e-cigarettes, NOTHING.

No Animals or Pets, PERIOD (Of course if someone told me they had a Service Animal then I of course showed them the property because by law I had to).

No Evictions, EVER

No Felonies, EVER

1st Month's rent is due BEFORE move in.

I could care less about their credit score because I know Sect. 8 is paying most of their rent anyway.

I also let them know that there will be a background check that THEY pay for through SmartMove

Also, in the ad it stated that (their portion of the) rent is collected electronically through E-RentPayment so if they don;t have a bank account then they need to have one before applying.

Still got TONS of inquiries. I do NOT do open houses for rentals because in my mind they are useless....someone calls tonight on Tuesday, they are excited to see the property and you have to tell them, I'm showing it between 12 noon and 1pm on Saturday? Please....

I tell them I can show it to them tommorow at 5:15 or 7:00....which is better for you? They pick a time and THEN each person that calls after that I simply mention the same thing....I do NOT tell them others will be there,....they simply figure that out when they get there and see that someone else is there .....It creates crazy demand.

I've done this twice in this "D" neighborhood I live in and once in the "C+" neighborhood the other rental is at in Concord.....works beautifully and I have no smokers, or animals or pets in either of my Section 8 rentals here.

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Hans Christopher Struzyna
Real Estate Broker · Oakland, CA · Member since 2015 · 67 posts · 51 votes
7y
Hi Steven, a 3/1 for 2500 sounds reasonable for most of Oakland, though your comment about it being a Class C neighborhood makes me wonder. Where is the property located? Also, do you have professional photos of the property on your ad? People in the bay area are so tech and phone driven that you need to get their attention with great photos. That could be part of the problem. Do you know how many showings you are getting or how many hits on your listing?
If you can give a bit more info on that, I might be able to provide some more thoughts.
0 Reply
Ned J.Pro Member
Investor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes
7y
One of 3 things

(1) Overpriced..... the market sets the price, not what you need it to rent for to make $$.... you need to research the market and comps in your area

(2) Location...... no one want to live there....at least not at the price.... you may be the crown jewel of the neighborhood, but the rest is trash

(3) Horrible advertising....... are you getting contacted by interested people? How many are showing up to open house? If you are getting poor initial interest, your advertising is not good...... where do you list, good description and pictures etc... if you are doing a decent job you should be getting lots of calls/inquiries..... most will not pan out but if you are getting low initial contacts, then something is wrong

Most of the time it's price....... the bay area is a hot bed rental market...... the price you listed seems reasonable at first glance, but it may not be justified by other factors

1 Reply
Calvin Kwan
Oakland, CA · Member since 2015 · 246 posts · 127 votes
7y
Where’s the location? Perhaps link us to the ad? 2500/month for 3/1 sounds reasonable for most of Oakland.
1 Reply
Steven Groshong
OP
Member since 2019 · 8 posts · 2 votes
7y
The property is located in East Oakland close to the San Leandro/Oakland border. The property manager originally recommended $2700 however I lowered it last week to make it more competitive. I have professional photos of the property on the add.

The property manager's weekly reports indicate:

+/- 50 inquires per week

+/- 5 showings per week (I'm assuming this includes time for the open house)

Via Zillow, I'm getting about 48 views/ day (96 views over 2 days) and it's typically around that level. Interest also went up after the price drop.

What are your thoughts?
See link for property: https://tinyurl.com/y5mch57l

0 Reply
Kenny Dahill
Investor · Tempe, AZ · Member since 2018 · 1k+ posts · 731 votes
7y
Hi @Steven Groshong,
Sorry to hear about the struggles. A few thoughts:
- Listing Sites: What listing sites are you currently using? While Zillow is probably the most common, there are markets that prefer a different listing site suchas RadPad, HotPads, Apartments.com, etc. The little bit of Bay Area I do know, I wouldn't be surprised if east bay had their own preferred listing site.
- Comparable Finishes: Besides the given of comparing rent, have you compared your finishes? Go to open houses for other rentals to see firsthand how you compare.
- Confirm Contact Info: This may sound weird but I've seen it before, confirm that the property is actually listed and the contact information listed is correct. I believe Zillow has a 'stats' page where you can see how many people have viewed your listing. Ask for the latest number.
- List it yourself: Not to jump to conclusions, is the PM saying no applications have come through or are they directed to you? I've heard stories here of landlords who found out the PM never listed the rental or were sitting on applicants, after all they manage other units and might have re-directed their interests. Take back some control and list it yourself to verify.
Hopefully you these ideas can solve your applicant problems. Best of luck.
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JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
7y
It doesn't look terrible from the pictures. Other thoughts:
1. I (and most tenants, I've found) prefer blinds to curtains.
2. Mismatched appliances in the kitchen gives a cheap feeling.
3. It sounds like a lot of money per sf (almost $250/sf for rent). Is that what similar units go for in that neighborhood?
Generally, if you are getting showings and no applications it's price, location, layout, not necessarily in that order. Price could mean overall price compared to the market or price compared to amenities offered. Location could be proximity to shopping, jobs, junky houses or crime zones. Layout means the rooms are weird, the flow makes no sense, rooms are placed in odd spots or configurations.
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DG A.
San Francisco Bay Area · Member since 2015 · 196 posts · 181 votes
7y
@Steven Groshong $2700/ month for that location is high. You would be more likely to get that in San Antonio. Or closer to lake merritt. Maybe even fruitvale. Further south than the 50s in the avenues is a different pricing scheme.
1 Reply
Brian Sparr
Real Estate Agent · Cary NC & Walnut Creek, CA · Member since 2009 · 99 posts · 84 votes
7y
Hi @Steven Groshong -
While I understand you wanting to stay firm and get your $2500/mo number, don't lose sight of what the current vacancy is doing.
Let's say it takes you another month and a half to get it rented at $2500/mo - that's 3 months total of no income ... but, if you could have rented it on day 1 for $2250/mo, you would have collected $6750 during that same 3 month period. Holding out for an extra $250/mo will take you 27 months to recoup the lost income.
Rent control and the cap on increases throws a twist into this for you, but I'd be doing whatever I could to get it rented sooner rather than later.
Good luck!
0 Reply
Steven Groshong
OP
Member since 2019 · 8 posts · 2 votes
7y
Hmm, I'm confident that it's the location because that's potential tenant feedback the property manager has provided me.

Since I lowered the listing price, the property is now one of the lowest priced 3 bedroom homes in the area (as of last week).
It should get some traction now. There were 3 people that left with applications at this past weekend's open house.
If no traction by the next 2 weeks, I'll open it up to section 8. Plus, I've heard there are certain benefits to section 8 (ex: rent increases go easier because the program pays for it if it's under or goes to the listed fair market rent)
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Brian Garlington
Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
7y
@Steven Groshong
I'm going to give you a news flash straight from Hedes......and a solution. That is a "D" neighborhood. I live just a few blocks from there where I am Househacking a Duplex.
You've already come up with your solution by the way. Advertise it on GoSection8 and you will get between $2,700 to $2,800/mo AND you won't be subject to rent control :-)
Zillow and Rentometer tell you that you should get $2,700 to $2,800/mo....and when I advertised on Zillow and CL I had COUNTLESS people reach out to me through Zillow THAT DID NOT READ THE AD. They see the price for a 3bd and simply call or text. Then when they get to the neighborhood they are put off. Then when I advertised on Go Section8 I had COUNTLESS people reach out that DID read the ad. I have 2 section 8 rentals here in the bay area and 2 in Cleveland by the way in addition to 4 other rentals that are NOT section 8. The good thing about Section 8 is that because the person's rent is subsidized by the government, they are NOT subject to the restrictions of rent control....even in Oakland.
If you're worried about what a potential renter may do....here's what I did when I advertised on GoSection 8......
No Smokers of any kind,....period....no vaping, no marijuana, no e-cigarettes, NOTHING.
No Animals or Pets, PERIOD (Of course if someone told me they had a Service Animal then I of course showed them the property because by law I had to).
No Evictions, EVER
No Felonies, EVER
1st Month's rent is due BEFORE move in.
I could care less about their credit score because I know Sect. 8 is paying most of their rent anyway.
I also let them know that there will be a background check that THEY pay for through SmartMove
Also, in the ad it stated that (their portion of the) rent is collected electronically through E-RentPayment so if they don;t have a bank account then they need to have one before applying.
Still got TONS of inquiries. I do NOT do open houses for rentals because in my mind they are useless....someone calls tonight on Tuesday, they are excited to see the property and you have to tell them, I'm showing it between 12 noon and 1pm on Saturday? Please....
I tell them I can show it to them tommorow at 5:15 or 7:00....which is better for you? They pick a time and THEN each person that calls after that I simply mention the same thing....I do NOT tell them others will be there,....they simply figure that out when they get there and see that someone else is there .....It creates crazy demand.
I've done this twice in this "D" neighborhood I live in and once in the "C+" neighborhood the other rental is at in Concord.....works beautifully and I have no smokers, or animals or pets in either of my Section 8 rentals here.
8 Reply
Robert Matelski
Rental Property Investor · Austin, TX · Member since 2018 · 214 posts · 270 votes
7y
Originally posted by @Brian Garlington:
@Steven Groshong
I'm going to give you a news flash straight from Hedes......and a solution. That is a "D" neighborhood. I live just a few blocks from there where I am Househacking a Duplex.
You've already come up with your solution by the way. Advertise it on GoSection8 and you will get between $2,700 to $2,800/mo AND you won't be subject to rent control :-)
Zillow and Rentometer tell you that you should get $2,700 to $2,800/mo....and when I advertised on Zillow and CL I had COUNTLESS people reach out to me through Zillow THAT DID NOT READ THE AD. They see the price for a 3bd and simply call or text. Then when they get to the neighborhood they are put off. Then when I advertised on Go Section8 I had COUNTLESS people reach out that DID read the ad. I have 2 section 8 rentals here in the bay area and 2 in Cleveland by the way in addition to 4 other rentals that are NOT section 8. The good thing about Section 8 is that because the person's rent is subsidized by the government, they are NOT subject to the restrictions of rent control....even in Oakland.
If you're worried about what a potential renter may do....here's what I did when I advertised on GoSection 8......
No Smokers of any kind,....period....no vaping, no marijuana, no e-cigarettes, NOTHING.
No Animals or Pets, PERIOD (Of course if someone told me they had a Service Animal then I of course showed them the property because by law I had to).
No Evictions, EVER
No Felonies, EVER
1st Month's rent is due BEFORE move in.
I could care less about their credit score because I know Sect. 8 is paying most of their rent anyway.
I also let them know that there will be a background check that THEY pay for through SmartMove
Also, in the ad it stated that (their portion of the) rent is collected electronically through E-RentPayment so if they don;t have a bank account then they need to have one before applying.
Still got TONS of inquiries. I do NOT do open houses for rentals because in my mind they are useless....someone calls tonight on Tuesday, they are excited to see the property and you have to tell them, I'm showing it between 12 noon and 1pm on Saturday? Please....
I tell them I can show it to them tommorow at 5:15 or 7:00....which is better for you? They pick a time and THEN each person that calls after that I simply mention the same thing....I do NOT tell them others will be there,....they simply figure that out when they get there and see that someone else is there .....It creates crazy demand.
I've done this twice in this "D" neighborhood I live in and once in the "C+" neighborhood the other rental is at in Concord.....works beautifully and I have no smokers, or animals or pets in either of my Section 8 rentals here.

Yeah, agree w/ Brian 100%. If you get a solid section 8 tenant, they will probably stay for-friggin-ever too, which means you won't have to deal with turnover costs and drama... plus you can get pretty decent section 8 rent increases each year. Oh, and almost nobody would call that the border of San Leandro and Oakland. It's "by the coliseum/airport". Huge difference.

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Brian Garlington
Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
7y
@Kenny Dahill is who I also agree with as well about your PM. Are you actually in the area? IF so.....why not do some of this yourself? Your PM telling you that 50 people inquire and that 5 people show up at an open house that they give for 1 hour doesn't sound like they are doing to much to get a tenant in there....It couls literally be nosy neighbors or people simply walking by.
If your PM doesn't want to deal with Section 8.....Find another PM before you start going on month 3 with no rents. If you are out of the area then I strongly suggest you do some of the intital screening yourself.....some people may turn their noses up at that and say, "I have a PM that's handling that!"............How's that working out for you :-)
You can place the ad (For free on Go Section 8)....and have them call your number? By the way, when they call....I usually don't pick up right away....I want to see if they leave a message and if they sound like they have some sense (Yes I said it!). If they do, I will TEXT them back and forth to get verification about the key pints of the ad, I.E. NO SMOKING AT ALL, etc.....Once they verify in writing then I will call them back and when I get them on the phone I simply ask two questions, "Why are you looking at moving from where you are now?"....."How many people would potentially live at the place with you?" In a 3 bedroom if someone says , "Just me". That's actually a red flag.....One person alone in a 3 bedroom, right. Whatever they say, I mentally add one more person.....Now if they say,. me, my 2 kids and my boyfriend....I say that's cool....When they say, my 3 kids and my mother.....I start getting a little nervous because that's 5 verified people....and it's pretty certain either her, or hr mother...or BOTH will be having male company over pretty regularly so that 6 or 7 people living where there is only 1 bathroom....I would pass on that by the way. IF she has a voucher and she say her and 3 kids....no pets.....then I'm good....even when the unmentioned boyfriend moves in you should still be fine.
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Mike Franco
Los Angeles, CA · Member since 2013 · 555 posts · 261 votes
7y
Time to get another property manager.

Those are not professional photos. Those are terribly distorted photos which were stitched together in some app, and they look baaad.
How could someone make straight walls look so curved? They are worse than amateur.

Just google "professional real estate photos" to see what they're supposed to look like.

If I were a prop mgr, I would be embarrassed to watermark those photos with my company name.

If you don't have a wide angle lens dslr camera, at the very least get a wide angle attachment for your phone.

Photos need to be slightly photoshopped to show the house in its best light.
0 Reply
Steven Groshong
OP
Member since 2019 · 8 posts · 2 votes
7y
Thanks for the tips!
Lots of lessons to be learned for my first property.

I'm going to switch things up, as you've advised above, and I'm going to include section 8 in the listing starting next Monday with no pets, prior convictions, evictions, etc.

0 Reply
Steven Groshong
OP
Member since 2019 · 8 posts · 2 votes
7y
0 Reply
JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
7y
Originally posted by @Brian Garlington:
@Steven Groshong
Still got TONS of inquiries. I do NOT do open houses for rentals because in my mind they are useless....someone calls tonight on Tuesday, they are excited to see the property and you have to tell them, I'm showing it between 12 noon and 1pm on Saturday? Please....
I tell them I can show it to them tommorow at 5:15 or 7:00....which is better for you? They pick a time and THEN each person that calls after that I simply mention the same thing....I do NOT tell them others will be there,....they simply figure that out when they get there and see that someone else is there .....It creates crazy demand.

This is a great strategy and one that we use as well. We will still occasionally do open houses but those correspond with times someone has to be at the property anyway. Outside of that we stack appointments so we usually have 1-3 interested parties all touring at the same time. It prevents wasting time running back and forth and accounts for the approximately 50% of "interested" people that never show up - i.e., if they don't show up it's OK because two other people are there and the showing agent didn't go there for nothing.
Also: we require phone or text confirmation 1 hour before or we assume they aren't coming. With multiple appointments it's not an issue, but on a one-off, if they don't confirm our text or phone call then it is assumed they're no longer interested in viewing the property.
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Mike Franco
Los Angeles, CA · Member since 2013 · 555 posts · 261 votes
7y
can sec8 tenants afford the rent increases?
0 Reply
Ned J.Pro Member
Investor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes
7y
Overall looks like a nice place....but those pictures? Looks like the mirrors at the Fun House at the fair....everything is curved and distorted...... my first reaction as an applicant would be WTF is up here? Pictures aside....if you are truly getting that much interest......assuming you believe your PM....... then its price relative to the comps in that area. If people are inquiring and even coming to take a look and passing, then they are deciding that the price doesn't match the unit and location
0 Reply
Brian Garlington
Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
7y
If there’s a rent increase then most likely Sect 8 is paying it.... not the tenant
0 Reply
Arya Jackson
San Francisco, Bay Area · Member since 2019 · 37 posts · 23 votes
7y
I'm a fairly new landlord and researched many ways to get my rental filled and I used this rental management software called Tellus app to do so. They listed my rental on top sites like Zillow, Zumper, Hotpads, etc. and I received tenant leads within 24 hours. They did all the hard work for me by listing my rental everywhere, I suggest you it out!
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Patti RobertsonBusiness Member
Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
7y
@Steven Groshong The fisheye photos make every room look like a fun house. Would be a simple adjustment to fix the photos.
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1 Reply
Hal Fitzgerald
Chicago, IL · Member since 2019 · 91 posts · 21 votes
7y
Maybe you didn’t try a better way to display your properties. I used to put my properties on Internet. But it will cost time and energy. Now I found tellus which is a helpful app. It can help me to advertise my property on the internet.
0 Reply
Anthony Rosa
Rental Property Investor · New York City · Member since 2019 · 703 posts · 538 votes
7y
Knock on doors in the neighborhood, see if they are renting and for how much. Maybe they know people interested in renting.
Is the area desireable? Is the area mostly owner occupied? Are you within or near a popular city?
0 Reply
Michael Noto
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
7y
@Steven Groshong From the info given the property is probably located in a worse neighborhood than you think it is and the price needs to be dropped accordingly. There is a huge difference between a C neighborhood people will feel safe living in and a low C/D neighborhood where people with anything to lose will stay away from. Could this be the case?
Also, I wouldn’t look into the interesting becoming more on Zillow after the price drop. That just means Zillow sent out an email in the area who has alerts set up and they clicked on it. Window shoppers most likely.
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Khanesia Washington
Real Estate Agent · Arlington, TX · Member since 2017 · 107 posts · 60 votes
7y
For the record Zillow's estimates are not accurate. Better photos would definitely help. Beautiful landscaping btw. If I were you I would give section 8 a try. There is always a shortage of houses accepting vouchers. Once you receive apps you can compare and go for the tenant that best meets your tenant criteria. I would also familiarize myself with the market. Get a report of what properties lease for, vacancy rates, etc. Check census data for population info, so you know the variations of people, education and incomes that live in the area
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