Need some help guys- I’ve a 2bd, 1ba apartment that I cant seem to generate ANY traffic for. I’ve used all the traditional methods for ads, craigslist, ANY free listing site, sign in the yard of course, I even printed out fliers and posted them at all the local laundromats, still almost NOTHING! I even started advertising $100 off first months rent, I’m pet friendly, new major appliances, new flooring, private entrance, off street parking, paid water, etc! The only downside is that it’s small (maybe 650sq ft).
Should I just start dropping the rent price? (I might be overpriced by about $25bucks/month or so…) I think part of the problem is its in a small suburb (<15K people) and the town isnt any sort of economic or cultural epicenter so there arent alot of people looking to relocate here…
I can’t let it sit vacant much longer without losing my pants! HELP!
What are you offering for referrals? Your existing tenants will start sending people to you if there is some $$ involved. Is there a local religious institution? Offer a donation if they refer someone. There will be announcements after every service.
It is always about the price. A properly prepared property usually rent instantly if it is priced a bit below the mid point. http://www.rentometer.com/ You want to have the best product at the best price.
I agree with everything mentioned above. First, you cannot be over on market rent unless you can justify it (nicest place in town). Also, referrals are a great way to get things moving. I offer $100 to my tenants if they bring someone my way. I don’t pay until the new tenant has been there for 90 days with no problems. I also put the words “free rent” in my ads. I offer to give the tenants a free month rent after 12 months. This gets them in the door and motivates them to stay and act right.
I have also been very flexible with letting the tenants spread the deposit over the first two months. I don’t really like doing that, but it has been necessary lately. Just ensure you get enough deposit up front to evict and file a writ if necessary. I haven’t been burned on that yet, but it may happen sooner or later. Using these methods, I have filled about 5 or 6 vacancies in the last two months.
Jake,
The way I see it, you either possibly get a premium price with more turnover and longer vacancies or you can be priced very competitively and hopefully get good long term tenants. I don’t like the idea of having your unit mentioned at a church service. What about advertising at your Post Office? Is there a bulletin board at your local restaurant/coffee shop? Are you friends with any Realtors that can steer people your way? What about Section 8?
Thanks for the tips guys! I have a couple more showings this week, and if I can’t get anything locked down I"m going to drop the price. The reason I raised the rent was that I got $600 for the apt a year ago, so I figured that it would make sense to raise the rent $25/month now(plus I’ve added some upgrades to the apt over the last year) , but apparently my local market won’t support that.
I really like the idea about offering a free month at the end of a year lease, sounds like a good way to get people in the door. Justin-a good point, I’d rather have competitive pricing with less turnover than the alternative.
I contacted local sec 8 people and both the city and county waiting lists are closed at this point, so the people there said it would be a long shot to get anyone through rental assistance…I guess I’m going to just keep advertising like hell and lower the price next week if I have to! Thanks again!
Just an update-offering the various rent specials REALLY has helped. within minutes of me dropping the price $25 and updating my ads to reflect the new rent specials I started getting phone calls to see the place! Hopefully one of the leads pans out!
Wash the windows and put up new mini-blinds if the windows are bare.
Sweep the porch, put up a hanging pot of geraniums.
Do a little staging–a fake potted plant, a bright rug by the kitchen sink. Make the place smell nice.
Ask everyone who sees it, “What changes would have made you rent this unit?” “Is there anything else that would make you choose this apartment?” Listen to your critics.
The country has been in deflation for at least a year, especially in any real estate related sector. While every local market has some differences, it was highly unlikely that you could actually raise the rent this year; even if only 4%. You'd likely be lucky to even get the $600 you got last year. The more likely scenario is that you'd have to drop the rent by that $25 or even $50 from last year's price. The poor number of showing you've had show that.
You can try the free month trick, although that would be equal to giving a $50 discount on last year's rent anyway. And then next year you would likely be in the same position unless rents skyrocket again. Also the lower rent advertises better. Lots of people just quickly scan the rental rates before settling down to any other details.
The staging may help although keep in mind that it also has a cost you have to figure in material, labor, and time. You'd have to compare its cost to how much extra rent (above the rentable tomorrow rate) you could get. Considering your low number of showings, I'd say your more likely to have priced yourself over the market than to have failed in the property's presentation.
You probably already know this but you need to ret the house within the month. I tend to rent my houses within 1 or 2 weeks. You need best product best price. You need to make the property ready with every amenity of the current market plus 1. That makes your property the best product on the market. Then you price the rent at less than market rates. I am talking about in a market that averages $1000/month price yours at $995/month.
If your market is $1000 and you are trying to get $1025 and you have a PITI of $700/month. If that house doesn’t rent by the time you pay 1 mortgage payment you have lost $700. If you got your full rent the next month of $1025. You would bring in ($25 X 12months) an extra $300/year. That is anet loss of $400. You HAVE TO rent the house in a week or 2 or you lose all that”extra rent” you were trying for. If you asked for rent of $995, you rent it immediately and you can always raise the rent after the lease expires.
BlueMoon is absolutely right. Here we are doing everything we can to pre-book units, even if it means dropping the rent to the customer’s comfort level.
It’s real easy for a month to slip by and there goes all the profit. Better to have the unit rented at less than full rent.
It’s easier to discount a furnished rental because tenants may stay for only 1 month. So it’s hoping for the full rent next month. Last March we were at 25% vacancy, way too much. So we started our more aggressive marketing–calling up prospective tenants and asking them, “What is your budget?” “Can you come up a couple of hundred and we’ll discount the rest.” Now we are full again with a waiting list.
Profit is about constantly adjusting to the local market.
I just lowered rent on a unit by $100 to keep a tenant. She gave notice saying being furloughed by the state and losing child support has made the rent out of her reach even though she loves the place. I offered 100 off if she signed a six month lease. Really didnt think it would make the difference but she said with that and a few other corners cut she could do. She’s been a great tenant and I’d rather lose the $100/month than $950 every month until I can fill it in this tough market. There are For Rent signs everywhere!
OK, so I found a single older woman (in her 70s) who LOVED the apartment and is on rental assistance (guaranteed check!). here’s the catch- she can’t move in until the middle of October (cuz her current landlord requires 60days notice AND took a 2month security deposit so she can’t swing two places).
Do I get her signed up and let the unit sit empty until then (the upside is that it would allow me more time to finish up some remodeling I’m doing…) or do I pass on her and gamble that somebody better will come along n the meantime?!! Yes, I’d be losing money for the next month, BUT would gain a longterm quality tenant. ARGH!
Are you sure you want to forgo a month and a half of possible rent to hold the place for her? There is no guarantee that she will stay after her lease is over. Remember that this possible long term quality tenant is leaving someone else so she may very well leave you for greener pastures once the lease is over. You could always have a gentleman’s agreement that you will rent the place to her if still available by October 1 (or maybe Sept 16 to be fairer) but keep advertising the place just in case you can get someone sooner.
That aside, if the response rate to your ads is still pretty low you may want to take her anyway. It could be your area has a high vacancy rate. For the interim you could find a short term tenant to help make up the lost possible rent. You can always find someone for the right price. The main thing you got to watch out for is rent control laws that may give those short termers rights to stay at the reduced rate forever and and laws that would affect your ability to lock them out once their time period is over, usually something like > 30 day residences in the areas I have seen. One way to help with this is to only take someone with a signed lease or plane/train ticket on or near the date they are suppose to vacate you place. That way you at least know they have set plans to leave.
We had a yard sale over at our vacant house yesterday. You could always generate some traffic there by doing this. Just make sure everyone who shows up knows the place is available for rent too!