All Forum Posts by: Meridith Om

The Zillow ad shows that you have lowered the rent from $950 to $925 to $825 over a period of 51 days. Renters are going to see this and think there is something wrong with the place, otherwise someone would have rented it earlier.

Remove the ad and then relist it with the lower price. Your ad is now fresh and says 1 day on Zillow instead of 51 days on Zillow.

The ad also says: In person showings are given to applicants that have completed a FREE online application and meet our minimum qualifications... Why don't you list the minimum qualifications in the ad so I don't have to waste my time filling something out that I won't qualify for? 

Hi @Meridith Om, sorry to hear about the current struggle.

Let's start off with some obvious questions:

• Advertising The Listing:  There are several options out there that you will want to consider.  Each have their own strengths and weakness:
  • Zillow: Free and popular.  This is what I always use
  • Craigslist: Oldie and it can get strange reactions.  But I have had success there.
  • MLS:  Access to realtors who might be helping tenants of their own.  Downside, your PM will need to split a commission with them.
  • Realtor.com:  Another website, I believe it cost money.
  • Local employers!  Put up a flier or call the business development person at larger businesses nearby.
• PM Responsibilities:  Finding a tenant should be 100% the responsibility of your property manager.  I always suggest you give them the flexibility to do their job properly.  At some point, it is your investment and as the CEO you must get involved.  What's done is done, now it's about taking action to correct the issue.  You need to create listings and then send them to the PM.
• Incentives:  How much longer will this property remain vacant?  What about if they stay for 1-year and you have to lease up in the winter again, which people have already admitted to being difficult.  Consider these:
  • Move-in Special:  Provide them a discount on the first months rent if they move in by a certain date.  NOTE:  Their security deposit still needs to be the non-discounted rent total!
  • 18-24mo Lease:  You're having a difficult time with this vacancy, what will happen next time?  Vacancy is our biggest threat as landlords for not making money.  Offer tenants a discount of $25-50 if they execute a 2-year lease.  That's 0% vacancy next year, you're almost at 25% vacancy this year.  At least that'll blend to 12.5% over 2 years.
• Referral Fee: Talk to your existing tenants and tell them you'll reduce rent if they know somebody who will move in.  You'll have to do your own screening.

Hiring a property manager should reduce stresses in your life.  And for the most part, the good ones do.  Maybe this is a bad PM or it's just tough conditions right now, it happens.  What's important is communication between you two.  Property managers hate to be hounded but at some point they should expect it; i.e. 3 month vacant unit.

Here are my suggestions for you and your property manager:

• Understand Your Management Agreement:  Read the agreement and confirm what their requirements are for unit turnovers.  Doubtful, but there might be a clause regarding units that sit vacant for a limit of time.  Are they performing all their responsibilities and duties they agreed to?
• Provide Proof:  If you are lacking in showings, ask them to provide their advertisements and dates they went up.  Ask to receive every 'interested' email so you can follow up with them.  You want to make sure they have truly done everything possible.
  
• Hire Outside Help:  This is an extended vacancy, hiring help could help resolve this issue.  But who will pay?  Your PM will argue they've done everything they can, again confirm with PMA their responsibilities.  While that may be true, they have a fiduciary responsibility to you.  The tough part is they will want a portion of the placement fee and not pay commission, that's breaching their fiduciary responsibility.  You will need to negotiate who will pay what and/or earn what.  Your goal is minimizing your losses, not minimizing their losses.

I wish you the best of luck, it's an unfortunate situation that every investor fears!

@Meridith Om

Unfortunately one of the problems is the location of the property. I know this city well and that is one of the areas that I just would not buy in. I think $850 for a 2 bed might be above market. At that price you are competing with a lot of other neighborhoods that are just flat out nicer. Sorry to be the bearer of bad news. However, spending some money to make your property more attractive overall WILL help. Good luck

Here is my take: 

It might be time for updates, new LVP flooring throughout (you should be able to get decent quality LVP for about $4/ft installed), online the carpet looks stained, and the edges of the linoleum in the kitchen and bath look grimy; having a patch of carpet in the living room makes the place look smaller. Paint the cabinets a solid color that coordinates with the counters (which look new) and replace the missing drawer, add cheap cabinet hardware, a microwave/hood combo and do a tile shower surround or replace the surround with one that isn't so drab. The white trim and baseboard look like they need to be cleaned or painted. For about $5K in updates you should be able to rent quicker, and get a better class of tenant, and the updates should last 5 years or more.

The door to the laundry should be closed in the picture of the living room, then a separate pic of the washer dryer. 

While it isn't always accurate Rentometer says average in the .5 radius for the last 6 months for a 2-bed average over $900.

Yikes...I'm concerned about several things:

What is the market rent there?  If it's higher than $850, increase your price.  You can always lower it for the right tenant but it doesn't sound like the lack of showings is due to the price. When the rent is below market price, it gives a perception that something is "off."  

Why isn't it renting? Is it hard to schedule a showing? Are callers being turned off by a list of requirements - versus being told how convenient/great the property is?  

Is it advertised for rent on the online rental sites (owners list for free)?  If not, please do this - and list your contact information.  At this point, something isn't working and you may need to gauge interest yourself.  If it is listed, you may want to change it. And, there are several military bases there...are you targeting that market?  

PM versus Realtor.  Some PMs are good at it all. Some are better at the management side than at marketing.  It may be time to bring in a realtor - maybe one who caters to military families - to market it.  

Fingers crossed for you...

@Meridith Om so I would echo what others have said mostly.

1) Few showings means bad pictures or no advertising or both. That is assuming that you mean people calling to request a showing are "showings". If there are lots of calls but few turn into showings then it's your PM's screening process or your PM's ads are attracting low quality callers (that can be because of bad pictures of a good unit or good or bad pictures of a bad unit). Get an objective 3rd party to review your advertising.

2) Why do you say that upgrading won't attract more interests? Nice properties always attract more interest than the same priced properties without upgrades provided they are advertised the same means.

3) Secret shop the PM. Have a friend call and go through the process with them. See what the friend's experience is. If it's anything but easy, it's your PM that is the problem.

4) Along the lines of item 1) above. Is the property listed on Zillow? If so, post the link here and people can give you feedback.