Units won't rent??
Hey Everyone,
My wife and I are managing our first property and are having an extremely difficult time getting tenants. It's 12 units of lofts in a great area, walking distance from one of the most popular downtown hotspots. They're 1bd/1bth with an open loft that could be used as a bedroom so we're marketing it as 2bd/1bth. We've used services like apartments.com, zillow, and avail and still the leads just trickle in. After 3 months of no tenants we just started a special of $125 off each month for the first 12 months and we're finally getting more leads, but no one is biting! So far we've only got one unit leased and we're getting worried. Any tips!
Here's the listing.
https://www.apartments.com/401-charlotte-lofts-kansas-city-m...
Adam
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@Adam York, sounds like you are answering your own question. If the price is similar and they offer more amenities.
Also consider that charging top dollar will likely mean not only increased vacancy which you are experiencing now but also increased turnover as people will be less likely to stay very long. A bunch of 1 year stays gets expensive for a landlord. You want to really think about the value proposition you are offering a tenant.
@Adam York I am familiar with these lofts as I am local to KC. Love the area, love the product. Price point might be a tad high. Yes a move in special, especially as we go in to the slow season of Sept- Jan. You may have to give away a full month free for these rent prices. I have sold quite a few this size apartment buildings and they have similar but lower rents, even for downtown/rivermarket/columbus park. Happy to chat further if you would like.
Priced too high if the tenants will also have to pay the utilities. Try getting a mix of you paying some of the utilities while they pay the others. Also, check what other landlords are renting out those types of houses on a monthly basis (comps).
@Adam York most major or local areas have a Facebook groups dedicated to finding a roommate or even an apartments so if your price range is within someone budget of finding a roommate u can subject your rental. I would post on Facebook market as well. I know I've look on there before. They also have military groups so if you live close to a military base I would post on there that ur looking to fill rooms most military people rent so if u can get one military person u could be bound to get plenty more. I would also ask ur recent tenants what brought them there and make an incentive for ur current tenants that if the can referral someone that actually gets the apartment they get a discount on rent/gift basket. Make it personal and meaningful ^^ I hope this helps I'm not an experienced investor but if I were u this is where I would start.
@Adam York since you aren't far from a hospital, you can look into devoting a unit or two to Medium Term Rentals for traveling nurses or other professionals. The units would have to be furnished and you'd pay the utilities too. You can check furnishedfinder.com to see what the going rents are in the area and call the local hospitals to see if they hire traveling nurses.
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#3 Classifieds Contributor
- Real Estate Agent
- Metro Detroit
Try actual floorplans.
Virtual staging.
Maybe some type of sound-deadening curtains for the lofts for more "bedroom" privacy?
Kitchens & baths are boring, add some "bling"!
- Michael Smythe
I've always gone by the rule, if someone is not willing to pay, its not worth what I am asking. Without doing a deep dive into your market (see below) - I would say it's priced too high. Looks like reading through the rest of the comments on here, the amenities that the other place offers for the same price is what is hurting you. Your pricing is making the other one look like a "deal". Although they may only use the amenities once to 10 times a year if even, it looks like a much better deal to go with your competition.
Suppose you were buying a car. Two lots across the street from each other both have the same car, same mileage at the same price but different trims. Even if you didn't need the higher trim level, which one would you buy if they are the same price?
HOWEVER, I do not know your market. Ask a Realtor or local property manager to see how long it is taking for places to rent and see if you are hitting the same on-market time or if you are behind. This is always my first step when I think my places are not renting "fast enough". I often find that I am just impatient, LOL!
- Christopher Jason Lloyd
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Priced too high and it shouldn't take you three months to know that.
1. Don't count the loft as a bedroom.
2. I searched comparable units with 900-1200 sq.ft. of comparable quality. Many of them in your price range have higher-end finishes (e.g. granite counters) and amenities like a pool or fitness center.
3. You lost three months of rent on 12 units? At just $1,500 a month, that's $54,000 in lost income. If you had dropped the price to $1,250 a month and rented them right away, you would have earned $45,000 for a difference of $99,000.
When you are sitting on that many vacant units, I recommend starting your prices low. As you fill units, you'll get a better idea of pricing and can increase. You really need to study the market and know your price point better or this is going to be a rough ride.
- Nathan Gesner
Price is always a huge variable and it is the most important one but there are plenty of strategies you can try before just continually attacking price, and the long-term solution in my opinion is not just hiring a manager but learning how to manage (This may not be for everyone but you need to know what a manager does inside and out).
Here are a few strategies you could try:
Marketing ideas
-Offer shorter lease terms/flexible terms
-Offer the first month free or the 13th month. Be creative.
-Paid gym memberships, local pool passes, bus passes, etc. Think of ways to add amenities that do not increase your capital expenditures significantly.
-Virtual staging
-Furnished units
-Place more signs out front, make it obvious the place is for rent.
-Post for rent on Craigslist, Facebook marketplace, and Use Zillow paid promotion service.
-Hold open houses to get traffic.
-Throw an event to generate traffic.
I hope this helps!!!
First guess time:
Folks looking for a 2Br are disappointed that there's only one, even though it has the loft. As a 2nd bedroom, it has no privacy being open the area below. If I were looking specifically for a 2Br, that would be a big "knockout" factor in my mind.
That high ceiling space costs a fortune to heat if any cold weather comes along and stays a while. I didn't see any ceiling fans and while the exposed beams look nice, I don't see how the ceiling is insulated. That means heat loss in cool weather and heat gain in summer. So, you may have design issues. I'm a former HVAC guy; so, my take on it may not represent the average apartment hunter.
Also, the washer being in a closet and the dryer in the kitchen seems a bit bizarre - almost an "Oops!' after-thought.
My $0.02 ...
@Adam York - One thing I would recommend also is it might be worth paying the money to have a few units professionally staged and some professional photos taken.
People need to be able to picture themselves living in a space.
Thank you everyone for the very helpful tips! I talked to the owner and he ok'd lowering the rents. Well see how that helps and I'll update the thread with what happens!
Cheers!
how did you come up with your rent, can you share?
Thx
Right now, you need occupancy more than you need market rents. Give the first few renters a deal. Who cares if they’re $100s below market rate as they provide activity and proof of concept - lights on, cars in parking lot, etc. You can try to make up the rent difference at renewals or with new tenants. I’ve been in this situation myself. It sucks. I’ve seen the building and I like the neighborhood. This seems like a winner after initial lease up.