Units won't rent??

Kansas City, Missouri
Marketing Your Property
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Units won't rent??

Adam York
Member since 2023 · 15 posts · 15 votes

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

0Reply
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Kevin Sobilo
Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes
3y
Quote from @Adam York:

@Jaron Walling Thank you!

There's a good variety. In the next neighborhood over where all the activity is I found the following, all 1bd/1bth apts.

917sqft: $1640

835sqft: $1729

893sqft: $1899

886sqft: $2250

The only thing I can think is that we don't offer any amenities; gym, pool, etc. The best advantage we have to an apartment is that you're front door is like 10 steps from your parking space.

@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. 

7Reply
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  • Jaron WallingPro Member
    Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
    3y

    @Adam York Does downtown Kanas City support these rent levels? We're in a similar mid west market but you won't find a 900 sqft. loft for $1700+ per month. Not possible. People won't pay it unless it's a bigger 2-3 bed apartment. 

    The listing photos, interior, and exterior looks amazing. 

    1Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Adam York:

    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


     Well there are only two reasons, overpriced or not well renovated. HIRE a PM co, PM fees are meaningless. 

    All the best 

    1Reply
  • Adam York
    OP
    Member since 2023 · 15 posts · 15 votes
    3y

    @Jaron Walling Thank you!

    There's a good variety. In the next neighborhood over where all the activity is I found the following, all 1bd/1bth apts.

    917sqft: $1640

    835sqft: $1729

    893sqft: $1899

    886sqft: $2250

    The only thing I can think is that we don't offer any amenities; gym, pool, etc. The best advantage we have to an apartment is that you're front door is like 10 steps from your parking space.

    2Reply
  • Kevin Sobilo
    Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes
    3y
    Quote from @Adam York:

    @Jaron Walling Thank you!

    There's a good variety. In the next neighborhood over where all the activity is I found the following, all 1bd/1bth apts.

    917sqft: $1640

    835sqft: $1729

    893sqft: $1899

    886sqft: $2250

    The only thing I can think is that we don't offer any amenities; gym, pool, etc. The best advantage we have to an apartment is that you're front door is like 10 steps from your parking space.

    @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. 

    7Reply
  • Matthew CrivelliBusiness Member
    Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes
    3y

    The market is telling you your asking monthly rent is too high. That's what I'm reading here. 

    @Adam York

    [email protected]413-348-8346
    Freedom Capital Funding, LLC523 Reviews
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    4Reply
  • Scott E.
    Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
    3y

    You're priced too high.

    3Reply
  • Adam York
    OP
    Member since 2023 · 15 posts · 15 votes
    3y

    Thank you everyone for the input!

    3Reply
  • Mackaylee BeachPro Member
    Real Estate Agent · Kansas City, MO · Member since 2020 · 1k+ posts · 492 votes
    3y

    Marketing as 2bd may be misleading and causing confusion and prospects to lose interest? Also does seem a bit overpriced for only being 1bd and no amenities.

    [email protected]
    2Reply
  • Corby GoadeBusiness Member
    Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
    3y

    Real talk- it's ALWAYS price. Always. Even if your units aren't in great shape, they'll rent if the price is right. If your units are awesome and they aren't renting- your price is too high. 

    In all honesty- think of how much time, stress and revenue loss this has been for you so far, and there's nothing to show for it. This is a sign that you need a professional property manager. I know most new investors don't want to pay for it, but you already have in your time, vacancy and stress. The annual cost for a professional property manager probably could have already been paid with the vacancy you've experienced. 

    I'm truly sorry you are stressed, but I'd suggest brining in a pro and letting them do their thing so you can focus on your thing- family, finding new deals, your day job, etc. 

    Best of luck!

    6Reply
  • Timothy Howdeshell
    Investor · Fresno, CA · Member since 2016 · 222 posts · 237 votes
    3y

    Agreed with @Corby Goade. Given that you purchased a 12 unit downtown, higher end apartment building as your first property this tells me that real estate is not your full time gig. If it were, most investors start smaller and work their way up in my experience. Consider that there are full teams of staff that specialize in a specific area of the property management business. Property management is very nuanced and complex which is why there are companies that do this specifically. By trying to self-manage you're essentially telling yourself that you're more capable than entire PM companies. Perhaps its time for a different strategy and hire a professional. Sure they have margin for their services, but think of that as paying for peace of mind. 

    And as all others have said, it's almost always price. We can't smell your units through the computer, but assuming no glaring issues like that, the market is telling you that people aren't willing to pay your asking prices for those units. 

    1Reply
  • Adam York
    OP
    Member since 2023 · 15 posts · 15 votes
    3y

    @Timothy Howdeshell When I said "first property" I meant first time managing. The property is owned and was developed by my father-in-law and his partners. They decided to self-manage to mitigate the losses from construction overruns and delays. He brought us on to help with getting them leased. To be honest, we are quickly getting to a point where we are considering suggesting they hire a professional management company instead if we can't get them leased soon.

    4Reply
  • Timothy Howdeshell
    Investor · Fresno, CA · Member since 2016 · 222 posts · 237 votes
    3y

    @Adam York got it. Thanks for clarifying. I was reading into your post to guage the depth of management experience. But this makes a lot of sense. I've done this myself where I went over on a project, decided not to flip it and hold as a rental (crappy BRRRR), and then self-manage to increase cash-flow and re-coup overruns.

    I hired a property manager 6 months later when I got to the point of evicting my tenant :-)

    If you're concerned about lack of amenities, perhaps go to the local gym, eateries, etc. and work out a discount pricing (If I get a membership for every tenant in my apartment building can I have it for 50% off). Then you can throw the free gym membership onto your listings as amenities. Yes you'll have to come out of pocket, but maybe less than the price decreases. 

    Whichever way you go, best of luck! 

    5Reply
  • Adam York
    OP
    Member since 2023 · 15 posts · 15 votes
    3y

    @Timothy Howdeshell That's a great idea! Thanks for that suggestion!

    0Reply
  • Mwazomela ThurmondBusiness Member
    Realtor · Newport News, VA · Member since 2022 · 32 posts · 26 votes
    3y

    @Adam York You can consider taking an out-bound approach and reaching out to realtors and brokers (email, call, LinkedIn as mail might not be fast enough). If you aren't already, you can even offer a referral fee or percentage of the first month's lease to motivate them. Other good sources for renters could be hiring agencies, military housing advisors, and other people who may know people who are relocating due to employment and don't have time to buy a house.

    1Reply
  • Tim Miller
    Rental Property Investor · Laurel, MD · Member since 2016 · 378 posts · 382 votes
    3y

    Looking over your ad, it looks great but you are over priced. But I also see there is over 370 available units for 1 & 2 bdrm upto 900 sqft. With this much competition, you have to stand out and your units don't. Don't take that the wrong way, your units look great! But you don't have anything to really make you stand out in this crowed field.

    My advise is to go back to Apartment.com, Zillow & Realtor.com and use their maps. Look at the rentals around your place. What's their price, what do they offer, if they are similar in sq ft or bigger then your. You may see that you want to drop you price to match other's or drop $25 to $50 under. Good Luck

    0Reply
  • Adam York
    OP
    Member since 2023 · 15 posts · 15 votes
    3y

    Thank you everyone for the feedback! This has been very helpful!!

    1Reply
  • Scott Mac
    Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
    3y

    Hi @Adam York ,

    I looked at your place...

    I'm just going to expound on my thoughts about it, looking it as a potential customer and as an owner would.

    Outside it's pretty, (but to me it) looks like a (nice higher income neighborhood) Medical Dental building vs. apartments, but that is not a deal killer. It's very pretty. The wood and the white work very well together and the immature trees and landscaping give it a fresh new look. That is a positive.

    I see no signage indicating it's apartments, no tombstone sign, no building signs. no NOW RENTING banners, no flags at the curb indicating Now Renting, (no unit being used as a temp rental office where you can sit all business day--you have 100% vacancy--12 units!!!)

    Inside, the spaces do not look like someplace a person would choose to live compared to a standard apartment...if the market were super hot, and getting a rental was hard...and super competitive, people will live anywhere they can get...and make do, but with more attractive offers from competitors at similar prices, they tend to shop for the best they can get for their money.

    Let me give you an example of two things that jump out at me...

    Bathroom: There is a huge space between the toilet and the sink and the shower is a (tiny) 30" x 30" (ish) looking space vs a 60" x 34" (ish) bigger space (aprox. tubs size) that fits people who like to eat a lot. (layout issue).

    Kitchen: Looks like a break room in commercial setting...tiny amount of cabinets in a Huge vertical and huge horizontal space (layout issue).

    And the Hugeness of the space seems to be amplified by the color white on everything.

    I also wonder if KC is a big "Loft" town, like NYC is, or do the customers there prefer more mainstream apartments with amenities and standard apartment layouts?  Meaning are you trying to sell Haircuts to Hippies and they don't want them, and how much price drop is needed to fill the place...(if you lower your tenant selection standards (ouch, ouch ouch) you might fill up, or if you hit a price low enough (ouch, ouch, ouch) you might fill up.

    Competitiveness (at a price point): 

       Yours: https://www.apartments.com/401-charlotte-lofts-kansas-city-mo/30xhqwg/

       A Random Competitor (seems to be about the same money based on the listing) (look at that big horse out front--those things are not cheap): https://www.apartments.com/steeplechase-apartments-kansas-city-mo/6wkv66v/

    Maybe (maybe) try staging, maybe try siting in the staged units for walk ins during the business day, maybe try signage, maybe try rent concessions such as 18 month lease 1 month free, $250 security deposit, prorate 1st, and last in advance. 

    Maybe try a top notch management company. 

    There are a lot of things you can (try), but I assume time is not on your side, and if the clock is ticking 100 vacancy of 12 units needs a lot of interested leads to make for enough closes to fill the place.

    You need interested leads!

    Good Luck!

    What a (potential) vs interest lead might see:

    2Reply
  • Marcus R.
    Real Estate Agent · Denver CO · Member since 2019 · 209 posts · 332 votes
    3y

    I think the units and pictures look great.  It's likely coming down to price.  Vacancies are a killer, drop your price to lower your vacancy days.  Right now a vacancy is costing you $62 a day.

    You can always gradually raise rent as most people might decide to stay with increased rent vs the cost/hassle of moving.

    1Reply
  • Craig Janet
    Member since 2019 · 223 posts · 261 votes
    3y

    As other's have said, it looks like an office building. The kitchen looks like a office breakroom. Maybe it needs an island or something. I dunno.

    However everything looks nice and well done but these are not "high end" finishes. It sounds like the units were priced based on the numbers to make it profitable and not what the market will bear. 

    Try lowering one unit substantially and see what kind of attention it gets. I'm not a big fan of gimmick promotions like first month free or half off. Just keep lowering the price until its rented.    

    4Reply
  • Marcus R.
    Real Estate Agent · Denver CO · Member since 2019 · 209 posts · 332 votes
    3y

    @Adam York - In the link you sent it says the application fee $500.  Is that correct?

    1Reply
  • Craig Janet
    Member since 2019 · 223 posts · 261 votes
    3y
    Quote from @Marcus R.:

    @Adam York - In the link you sent it says the application fee $500.  Is that correct?


     Wow! I didn't noticed that. That's outrageous no one is going to pay that.

    0Reply
  • Adam York
    OP
    Member since 2023 · 15 posts · 15 votes
    3y
    Quote from @Marcus R.:

    @Adam York - In the link you sent it says the application fee $500.  Is that correct?

    Wow! That's a major typo! It should be $55! The deposit is $500.

    1Reply
  • Jonathan R McLaughlin
    Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    3y

    wow, the post @Scott Mac shared looks sooo much more worth the money than this. If you are competing with luxury price points you are in trouble with these finishes/carpeting. Being the best and coolest thing at an ATTRACTIVE price should help. And yea, the $500 fee was probably a killer :)

    I might lean in to the loft vibe a bit more. Kill the two bedroom as the lead and emphasize "open floor plan", the adaptability of the space (here is where you can mention it can function as a two bed) and light and views. Pictures of the ameneties you mention might help too. 

    You already have a move in special, but it sounds like you need to be more agressive and then offer the special.

    If you are going young professional I would mention wireless speed and coverage too. Consider offering your own as an amenity though that can be a pain in the **s

    1Reply
  • Marcus R.
    Real Estate Agent · Denver CO · Member since 2019 · 209 posts · 332 votes
    3y

    No worries, we've all done that.  It's probably just on apartments.*** but check the other website just to be safe.  Shouldn't be a major issue though.  I assume most would realize that's a typo. 

    0Reply
  • Matthew Masoud
    Investor · Orange County, CA · Member since 2014 · 363 posts · 408 votes
    3y

    Beautiful looking lofts BUT I did put your property in on Apartments.com as if I'm a renter and there are properties with significantly more amenities in that price range.

    Your price range puts you in comparison with lofts that have pools and lounging areas.

    See:

    https://www.apartments.com/city-club-apartments-crossroads-k...

    and

    https://www.apartments.com/kc-loft-central-kansas-city-mo/9w...

    You got a nice rental there just priced a bit too high in my opinion.

    1Reply
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