Advertise a unit 3 months before it's available?

12 Replies

I'm closing escrow and starting reno on a duplex in two weeks. The reno is scheduled to end on November 18 (and we've worked in buffer time, so I'm confident we'll be done by then). At that time, I'll be moving into one unit and renting the other.

The duplex is in an upscale neighborhood in Los Angeles where units like this (3 beds, 2 baths, private yard, private 2-car garage, central heat and air) rent for $5000+ and comparably sized houses rent for $6500+. Within the neighborhood, this duplex is especially well-located for walking to shops -- a total rarity in LA!

I'm thinking about advertising the unit as soon as escrow closes. I can include pictures of the exterior and rooms that won't change much (dining room, living room), as well as describe the scope of work to be done, the finishes and appliances to be installed, etc. The availability date will be November 18. Is this a good idea or a bad idea? The unit will be renovated to high standards and its location is very desirable, so I'm hoping some potential tenants with plans to move in a few months will see the ad and bite. Is this hope unrealistic? Should I wait until closer to the availability date -- say, six weeks out -- to advertise?

Thanks!

I would normally say it's way too early. But, you should find out the tax implications of putting a rental "into service". I'm not a CPA, but it's just a question off the top of my head. But for actually finding a tenant? Way too early. Rehabbed units shouldn't need more than 30 days. 

We gutted a studio in a very desirable location and advertised it 3 months in advance. People had no problem envisioning what it would look like and it was totally transformed from what they could see in person at the time we were advertising. We were able to get a signed lease in advance with ease. Location, location, location...

Absolutely not! I learned the hard way. People need a date for planning purposes and things never go as planned.

I never ever advertise till I am 100% complete. Much less stress this way. 

@Jonathan Schwartz the rental demand is strong enough here in the Los Angeles market that you don't have to advertise it until you are much closer to being finished.  I recommend a maximum of 2-3 weeks out.

Likely depends on your market/price point. In Chicago I have found 2 months to be ideal. For really high end units 3+ months prior may make more sense. 

Going off of what @Michael T. said, if the market is hot enough I think you only hurt yourself, if you find someone great, but now you are under the gun on the rehab. and i believe in murphy's law if it can go wrong it will. If you don't find tenants looking 3 months out come when we are two months out you already have 30 days market time which means many renters will just assume their is something wrong with it and pass

@Jonathan Schwartz I would wait until closer to when the unit is ready maybe 4 weeks out if the demand is as high as you say then you won’t have a problem filling it. It’s hard to get a tenant to commit to your unit more than a month out in my experience and sometimes people get turned off by the fact that a listing has been open for several months. Also you never know when your project will get held up by permits, utilities or something else.

Originally posted by @Anthony Wick :

I would normally say it's way too early. But, you should find out the tax implications of putting a rental "into service". I'm not a CPA, but it's just a question off the top of my head. But for actually finding a tenant? Way too early. Rehabbed units shouldn't need more than 30 days. 

It is not "in service" if it is being rehabbed. For tax purposes the property needs to be advertised and rent ready to be considered in service.

I agree that it is too early. In my experience advertising too early can be a negative, partly because it is a waste of time, but it also wastes the "new to market" appeal. 

I wouldn't do it.  Its way too soon plus it sounds like you wont have any problem finding a tenant.  People change their minds all the time especially waiting 3 months.  Tenants need a solid move-in date.  Id say wait until the house is ready.

@Jonathan Schwartz

I would wait until it’s totally done and you can put up professional photos and a nice description. A nice place will rent quickly and you never know what might delay your rehab! Not worth advertising until it’s done.