Time of Year, Property Manager, or User Error?

The property has been listed for 77 days awaiting for a tenant. My question: Vacant because Time of Year, Property Manager, or User Error?

Listing: 1053 Parksley Ave, Baltimore, MD - https://www.zillow.com/homedetails/1053-Parksley-Ave-Baltimore-MD-21223/36546090_zpid/

Time of Year: My optimism says the reason is the time of year, but at this point, something needs to change whether it’s the Property Manager, discounts/rewards (first month half off, etc.), or I need to lower the rental amount..

Property Manager: This is a property manager that was recommended via a real estate agent. Comes from a large company (based out of two different states) and has standard fees. He communicates well and is analytical. My fear is he is waiting for online leads versus taking action. I have a call scheduled to ask him directly to see what he has been doing specifically (which may remove any concerns I have).

User Error: Rent is too high. Currently at 1150. Rentometer shows Average $1085. MyRentRates: $1195. Rent Zestimate: $1195. PM says it’s good where it is. I asked him to lower it from 1200 à 1150 about 30 days ago.

What do you recommend my course of action? I have several lessons learned for the next rental, but encourage your wisdom and guidance as well. Any assistance is greatly appreciated!

@Nathanael Rojas I don't know what you expect them to do besides wait for online leads, you can't force people to rent your property, it is probably a mixture of seasonality and rent too high.  If you started too high, you lost most of your potential tenants in the first two weeks, now that you got to Thanksgiving things are really slow until after the new year.

I am on the train and bored, so here is my 2 cents:

1) House is small, therefore your tenant pool will be small.

2) I don't see this on the MLS, if I had a tenant, how would I know about it?

3) An even smaller house on the same street that is a 2/2, rented last December for 1250 (From the pics it did look nicer though). It took them 33 days but they got it rented. I listed something for rent in West Baltimore and we are in the process of finalizing payments, took 40 days but got my landlords number. Things do rent in the “off months.”

Final thoughts: I think your rent is reasonable, your PM isn’t working hard enough.

Originally posted by @Aaron K. :

@Nathanael Rojas I don't know what you expect them to do besides wait for online leads, you can't force people to rent your property, it is probably a mixture of seasonality and rent too high.  If you started too high, you lost most of your potential tenants in the first two weeks, now that you got to Thanksgiving things are really slow until after the new year.

 Thanks for the response @Aaron K. 

After reading the response from @Justin Lanciault, apparently the Property Manager could also add it on the MLS? A quick Google search shows: Dealing/negotiating with the prospective candidates, networking/discussing the property with others..

Honestly, I'm not sure, hence why I'm reaching out to the BP community for feedback and guidance before I make any decisions.

You bring up a solid point regarding the first two weeks on the market. I'll be sure to remember that for the next one, especially if it's later in the year.

What would you recommend I do next, hold it out until Jan/Feb or lower the rent again?

Originally posted by @Justin Lanciault :

I am on the train and bored, so here is my 2 cents:

1) House is small, therefore your tenant pool will be small.

2) I don't see this on the MLS, if I had a tenant, how would I know about it?

3) An even smaller house on the same street that is a 2/2, rented last December for 1250 (From the pics it did look nicer though). It took them 33 days but they got it rented. I listed something for rent in West Baltimore and we are in the process of finalizing payments, took 40 days but got my landlords number. Things do rent in the “off months.”

Final thoughts: I think your rent is reasonable, your PM isn’t working hard enough.

 @Justin Lanciault I do appreciate your time and energy to compose a response.

I'll be sure to ask my PM about the MLS.

Regarding your final thoughts: My PM will next recommend either spending $100-150 for professional photos and/or offer a discount for the first month to entice applicants. Thoughts?

Should I have any concern regarding my PM?

Tbh this is a conversation you should of had with him before putting the house up for rent. Good PM’s (Outside of the gentrifying areas) in Baltimore are hard to come by.

Regarding pictures, they are sloppy, but I used cell phone pics for my listing - just made sure to showcase all the fine points and how big the rooms are, etc

Originally posted by @Justin Lanciault :

Tbh this is a conversation you should of had with him before putting the house up for rent. Good PM’s (Outside of the gentrifying areas) in Baltimore are hard to come by.

Regarding pictures, they are sloppy, but I used cell phone pics for my listing - just made sure to showcase all the fine points and how big the rooms are, etc

Could you elaborate on "this conversation"? What exactly should I have said/asked/requested regarding putting a property up for rent. Don't know what you don't know. I suppose I assumed the PM would do everything necessary to get the property rented as he will then get paid and then deal with the tenant. 

@Nathanael Rojas

1) Do you personally have a rental portfolio? How many? Where?

2) Why are you in property management?

3) What are your goals as a property manager? Short-term? Long-term?

4) What is the process for listing my property for rent?

5) Do you manage properties similar to mine? In the same neighborhood? What makes that neighborhood attractive to renters?

6) What’s the average price? Can you back that up with data?

7) How long will it take to rent? Data?

8) Where will you be posting the property? Why?

9) Do you have tenant leads that you follow up with? How many? How often?

10) Do you work with realtors and advertise the property to them? Why or why not?

I am assuming 1st month’s rent to the company upon execution of the lease?

@Nathanael Rojas to me putting a property on MLS is part of the reason I pay a leasing fee and is expected every time, especially if you don't get traction early.

@Nathanael Rojas I can tell you personally it’s most likely the time of the year nobody moves during the busiest time of the year. Ask yourself would you want to move in the cold and when family is coming in town probably not if yo think it will help lower your rent but it’s for sure this time of the year.

Originally posted by @Aaron K. :

@Nathanael Rojas to me putting a property on MLS is part of the reason I pay a leasing fee and is expected every time, especially if you don't get traction early.

I'll second this. If your PM didn't put it on the MLS as part of their standard marketing package then I would look for a PM who is more professional and serious about getting your property leased.

@Nathanael Rojas hey Nathanael, I dont personally own anything in Baltimore, but last time I talked to a PM there he told me he always lowers the rent by 100-200 if they have to find a tenant in the wintertime. Less people are moving at this time of year when its dark, cold, in the middle of the school year/holidays etc. Id recommend trying to find someone to rent it for a little less on a 6 month lease then try to get into a cycle of renting for a year starting in the summer. Best of luck! Kyle

I am about to go through the same situation. I have rental property in the panhandle that is currently being renovated with expected completion next or the following week - so only weeks before Christmas. I know not to lower my standards and get a bad tenant, but am planning to lower the price to make it very attractive and hopefully rent by January. @Kyle Deutschmann I like the idea of a lease expiring during the summer, and I could charge the market rent then and be fine because after this reno it will be like a new home, but am worried about potential turnover if I raise the rent like that after a 6 month lease. Have you dealt with that in your units?

@Blake Dailey hey Blake good to hear from you! its hard to say which route is best. Turnover/vacancy can certainly be a cash flow killer so youd have to compare what the total expected vacancy/turnover could cost vs. keeping the unit rented for less than its full potential to see which is most cost effective. You could also consider an 18 month lease to avoid the vacancy for a while and still end in the summer, but then of course you lock yourself into lower rent for that entire time. Hope that helps or at least gives some additional options to consider!

@Kyle Deutschmann yeah man you too, hope you are doing well up there in TN. That’s a good point about the total turnover/vacancy cost- I’ll have to add that in compared to the opportunity cost of renting at a lower rate for longer time. Thanks for the advice! 

It can be multiple things but it may be nothing. That happens at times. 

Originally posted by @Justin Lanciault :

I am assuming 1st month’s rent to the company upon execution of the lease?

Thanks for the additional questions @Justin Lanciault. 

Yes, 1st month's rent will go to the PM

   

Originally posted by @Aaron K. :

@Nathanael Rojas to me putting a property on MLS is part of the reason I pay a leasing fee and is expected every time, especially if you don't get traction early.

I'll be sure to inquire with future PM's. Thanks for the response and explanation.

Originally posted by @Jermell Shavers :

@Nathanael Rojas I can tell you personally it’s most likely the time of the year nobody moves during the busiest time of the year. Ask yourself would you want to move in the cold and when family is coming in town probably not if yo think it will help lower your rent but it’s for sure this time of the year.

Not always easy to place myself in the shoes of a tenant, @Jermell Shavers! 

It does make sense and I thank you for the opinion. It's nice to have someone confirm and validate the thought of "time of year". 

In your experience, is it a gradual increase in leads/desire/applications? Or should I plan for vacancy until Feb/Mar/April?

If they are collecting 1 months rent then they BETTER be doing more than throwing it up on their website and Zillow!

@Nathanael Rojas. It’s not in the place of a tenant it’s in place of a human being who wants to move in the winter time ? Tenants landlord nobody

Originally posted by @Joe Norman :

Originally posted by @Aaron K.:

@Nathanael Rojas to me putting a property on MLS is part of the reason I pay a leasing fee and is expected every time, especially if you don't get traction early.

I'll second this. If your PM didn't put it on the MLS as part of their standard marketing package then I would look for a PM who is more professional and serious about getting your property leased.

 Great feedback, Joe. This definitely helps me understand what my expectations should be of a Property Manager. Through all the interviews and narrowing down to a top 4, it's still amazing to see how different they are.

Originally posted by @Justin Lanciault :

If they are collecting 1 months rent then they BETTER be doing more than throwing it up on their website and Zillow!

Couldn't agree more! 

Originally posted by @Kyle Deutschmann :

@Nathanael Rojas hey Nathanael, I dont personally own anything in Baltimore, but last time I talked to a PM there he told me he always lowers the rent by 100-200 if they have to find a tenant in the wintertime. Less people are moving at this time of year when its dark, cold, in the middle of the school year/holidays etc. Id recommend trying to find someone to rent it for a little less on a 6 month lease then try to get into a cycle of renting for a year starting in the summer. Best of luck! Kyle

Thanks for the message, Kyle! Two solid points. Instead of eliminating any acquisition during these months, utilize strategies (lower rent and shorter lease, for example) to continue purchasing, rehabbing and renting out during the winter months. I'll add this to the convo with my PM.