Tenant Placement, house in Katy, TX

Member since 2020 · 2 posts · 1 vote

Hi all,

I live in California but own a rental property in Katy, TX. The tenant is unlikely to renew, and I'd like to minimize vacancy + tenant placement costs. It took approx 60 days to place the current tenant with a property manager I hired for the job. He placed the unit on the MLS' 30 days prior to the lease expiring + 30 additional days before we found the new tenant. All-in, I lost 1 month of rent + the 1 month cost to the property manager.

What's the best way to try and minimize my loss this time around? I'm hoping to find an agent or service who is willing to work on a performance basis, e.g. lower fee if it takes longer than 30 days.

Thanks
Eugene

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Michael SmytheBusiness Member

Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes

@Eugene Park creative thinking, but unlikely to succeed.

Vacancy is part of this business and you can't always control it!

What happens if the current tenant REFUSES to allow access for showings to potentially new tenants?

Yes, you can try to force the issue, but then they can easily sabotage showings by leaving the home messy and scaring prospects away with negative comments.

What research have you done on the average Days On Market (DOM) for rentals in Katy, TX?

I'm guessing you're going to want the highest rent possible with the lowest DOM?

If the DOM is more than 30 days, what are YOU going to do to get your property rented out faster than average?

Requiring your PMC to price it at the top of the market, usually negatively affects DOM.
- If you want to rent it fast, ask below market rent!

A quick check on Zillow, shows there are currently 2,900 rentals on the market in Katy, TX:
https://www.zillow.com/katy-tx/rentals/?searchQueryState=%7B...

This seems like a lot, so the next question is, what research have you done on the Rental Absorption Rate for Katy, TX ? This will tell you how many rentals are being filled each month, which you can use to predict vacancy time.

How many current rental listings have had price reductions? Sign of a soft market with increasing DOM.

How well do you understand the seasonal effect on DOM and absorption rates? See the graph below and notice how DOM increases in the winter months:

Again, your idea of offering a commission/fee that decreases the longer the vacancy sounds logical, but in practice is impractical due to factors outside an agent's control.

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Investor · Toledo-MetroDetroit-Dallas · Member since 2022 · 122 posts · 71 votes
1y
@Eugene Park, my suggestion is to look on Zillow for Homes that have very nice rental listings in Katy. I'm talking fancy pictures, maybe even a video and virtual staging. And then I'd look for listings that got the most interest, not for ones that have been on the market for a while. For example, listed for 2 days and 30 people saved is a good indicator. Take a note of the prices too of the listings that move quick, you might want to list slightly below market.

Then I'd contact the listing agent on those listings that are doing very well and ask them if they can list yours too!
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Michael SmytheBusiness Member
Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
1y
@Eugene Park creative thinking, but unlikely to succeed.
Vacancy is part of this business and you can't always control it!
What happens if the current tenant REFUSES to allow access for showings to potentially new tenants?
Yes, you can try to force the issue, but then they can easily sabotage showings by leaving the home messy and scaring prospects away with negative comments.
What research have you done on the average Days On Market (DOM) for rentals in Katy, TX?
I'm guessing you're going to want the highest rent possible with the lowest DOM?

If the DOM is more than 30 days, what are YOU going to do to get your property rented out faster than average?
Requiring your PMC to price it at the top of the market, usually negatively affects DOM.
- If you want to rent it fast, ask below market rent!
A quick check on Zillow, shows there are currently 2,900 rentals on the market in Katy, TX:
https://www.zillow.com/katy-tx/rentals/?searchQueryState=%7B...
This seems like a lot, so the next question is, what research have you done on the Rental Absorption Rate for Katy, TX ? This will tell you how many rentals are being filled each month, which you can use to predict vacancy time.
How many current rental listings have had price reductions? Sign of a soft market with increasing DOM.
How well do you understand the seasonal effect on DOM and absorption rates? See the graph below and notice how DOM increases in the winter months:
Again, your idea of offering a commission/fee that decreases the longer the vacancy sounds logical, but in practice is impractical due to factors outside an agent's control.
Logical Property Management4.9454 Reviews
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Jim Berman
Property Manager · Houston TX · Member since 2025 · 20 posts · 11 votes
11mo
Many offices stopped doing occupied showings for rentals a few years ago for the reasons @Michael Smythe noted. Sometimes you'll have a cooperative tenant, but more often than not they're not going to have the motivation to make rental showings go smoothly, and many perspective applicants aren't going to be as comfortable viewing the occupied rental. Applicants will also be hesitant to apply due to not knowing what condition the rental will be when they move.
If you're looking to lease quickly in the fall/winter, you're going to need to price the home aggressively to make it a good deal when it hits the market. This is the slowest leasing season of the year, so pricing on the upper end should be avoided if possible.
Be leery of companies offering too low of a leasing fee - in Houston most leases are accomplished by advertising on the MLS with a realtor co-broke. If a company is offering a low leasing fee, that means they're more than likely not advertising on MLS or if they are, are offering a reduced commission to other agents.
Final suggestion would be offering a 16-17 month lease when you find new tenants. I'd want a lease expiring in April/May of 27' vs December 26' so you can take advantage of the summer leasing season the next time it's up for renewal.
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Emily Koelsch
Rental Property Investor · Memphis, TN · Member since 2022 · 48 posts · 43 votes
11mo
Have you considered trying to manage most of it yourself - and just having someone on site to handle showings? I've had bad experiences with property management companies and find that it's not that hard to manage remotely (with the exception of the showings themselves). I also find that it's easier to place quality tenants when they're dealing with you and not a property management company - a lot of tenants have had bad property management experiences and avoid listings when they see a company with a bad reputation. I might explore your availability to create a listing, correspond with applicants, schedule showings, and do tenant screenings from afar. A little bit of extra work on your end can lead to drastically better outcomes for you and finding quality tenants who will take care of your property, pay rent on time, stay. etc.
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Matthew Lorentz
Property Manager · Houston, TX · Member since 2019 · 4 posts · 2 votes
11mo
When I manage properties I typically prefer not to show the home until the previous tenants have moved out. However, you can certainly get the ball rolling ahead of the scheduled move-out (ensure certain utilities stay on, call cleaners & maintenance, etc.). To address the 1 month loss - unfortunately, from my experience, vacancy is just something that needs to be factored in.
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Jesus RomanBusiness Member
Real Estate Agent · Houston, TX · Member since 2020 · 175 posts · 75 votes
11mo
There is no reason a home should be taking more than 30 days to lease if it's priced accordingly.. Did you find yourself lowering the price when you went with the PM? Especially being in Katy you should have constant demand on your property to lease it out quickly.
713-594-9124
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Cameron TopePro Member
Property Manager · Katy, TX · Member since 2015 · 1k+ posts · 1k+ votes
11mo
Hey Eugene,
Managing vacancy is incredibly important and it's smart you're thinking about how to reduce the turnover time. I see owners all the time be lax with vacancy and then wonder why at the end of the year they haven't made any money...
As far as getting your property leased timely, Katy has always leased well for us with tenants that are mostly multi-year residents. So I don't think it would be an area issue.
Then it's a product and presentation question - is your property appropriately priced for what you're offering? If yes, then you'll probably lease quickly. If not, then drop the price based on your weekly activity level. The market will tell you what price your property will lease.
We list the property ~2 weeks before move out but don't allow showings until the property is vacant.
We offer a 30-day lease guarantee and I'm sure there are other management companies that do it, but I've never heard of an agent offer it. Agents will usually re-lease the property if a tenant breaks a lease, but that's the most I've heard regarding discounting their commissions.
Take professional pictures. Do the necessary maintenance. Price it appropriately. List it early. And be responsive to leads.
Best of luck!
[email protected]832-770-7090
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Michel Ribner
Member since 2024 · 6 posts · 2 votes
11mo
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Melanie ThomasBusiness Member
Real Estate Broker · San Antonio · Member since 2022 · 1k+ posts · 490 votes
11mo
I’m in San Antonio TX and we get a lot of calls from owners in situations just like this where their home has been sitting vacant under another management company. Nine times out of ten when we run the comps the property is priced too high and that’s the number one reason homes sit on the market.

Make sure your photos are high quality and truly show off the home. Good visuals and a competitive price point are what drive traffic and applications.

Also follow up on every single lead that comes in. I’ve seen a lot of agents miss opportunities simply because they can’t keep up with call or email volume. That’s one of the big benefits of hiring a professional property management company because they usually have dedicated leasing teams and phone lines to handle inquiries quickly which helps convert leads faster and minimize vacancy.
Just a few things to keep in mind as you get ready to re-list. Good luck & happy investing!
[email protected]
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