I have trouble finding quality tenats normally, but lately struggling to find any!
What are the markets like for you and what are you using to bring people in? I really don’t want to start down the road of reducing rents to bring people in because you never know how long that ends up lasting.
BTW, I am in Fort Wayne, Indiana market.
What kind of standards are you setting when screening tenants? Also, what kind of properties are we talking about- lower income urban areas, suburban areas, high crime areas, etc?
Hi Stanfield,
I am in Dallas Forth Worth area in Texas, I have only done one rental so far so I am by no means an expert. The climate here seems really good for rentals. You just have to find the median rent for the area and come in a bit lower. It also helps if you do a decent job of rehabbing the unit prior to renting it out. I most likely over did my rehab for a rental but I had so much interest that I had to turn people away two months after I had a signed lease.
If you buy low enough you can do a few extras, I put laminate flooring instead of carpet, tile in the bathrooms and new windows and doors. All within the original budget. Almost all of the tenants commented that this was by far the nicest house they had looked at.
If you want to throw some extras in, offer a Microwave oven or Washer/Dryer with the unit, just be prepared for the repair cost. In most cases you can buy these cheap at second hand stores or Habitat for humanity etc…
//Tex
Hi Stanfield,
I have around 15 properties in Ft Wayne and it has been a very difficult market to finds renters which is the reason I have not purchased additional properties there. Additionally the code officers in Ft Wayne have a disdain for investors which has increased my capital expenses for random items. What has worked best for me in this area is Craigslist. I tried the local paper and got no response. Additionally I switched up and have been marketing properties on land contract. This has helped dramatically in getting new tenants. In summary signage and Craigslist have been my biggest sources.
As for credit quality, a fico score in the Midwest is irrelevant because of the poor credit quality. I run full background checks and use the following underwriting grid:
Underwriting Guidelines
If you google seg advisors you can locate videos on locating tenants in this market.
Hope this helped, jph
Hello to all, I have recntly purchased some duplexes in Louisiana and I too tend to agree the rental market is tough these days. One of my newly renovated units has been on the market for over 60 days and I haven’t got tenants in either side as of todate. I have lowered the rent by 25 dollars to see if that gets some attention. I too received numerous complements regarding the out-come of the renovations. I may be a little bit high for the area far as the rent is concern but of course I recently adjusted that by $25.00. I went a bit over budget with the renovations but I purchased on the low side so I could afford to do a little extra I thought. I would love to get a ROI.
I too have the unit posted in the local news paper as well as the local apartment guide. Also I have it listed on the site used by section 8. I guess this is were patience comes in.
Bonchie
How about a move-in bonus. $100 off first month’s rent. I’m actually offering 1/2 off right now. Still getting only 1 or 2 calls per week though. It’s tough out there.
If a female is coming to look at the property, have a female show it. The girls are more likely to establish some bond.
When someone does show up, hand them a flyer with all the great aspects of your rental that they can take with them. Keep one in your hand and use as talking points.
Make sure your Craigslist ad has a lot of nice pictures.
Notice how the apartments in the area are marketing, and do it better.
Good luck, Mike
Bonchie,
If you’re “a bit high for the area”, your vacancy for trying to push the market rent is going to kill any benefit that extra rent per month would give you. Personally, I like to be very affordable and have residents think they’re getting a good value rather than thinking they’re over paying. We don’t do specials or anything like that. The rent and deposit are reasonable and we take care of our places.
On the house we’re finishing up now, we’ve had several people come by while we have been working on it. We just finished the interior tonight and got the security deposit. Tomorrow is the lease signing. No advertisement at all beyond people seeing us putting some good effort into making the property better. The most recent people that came over were told this house was probably taken, but we’d have another one available in a few weeks. We’ve got the other one under contract. So I’m just keeping a contact list and giving everyone rental apps. Our Realtor will also refer people to us when we have vacancies.
Justin is absolutely right. The market sets the rent, not the landlord. If you’re rent is too high for the area, it’s going to be vacant a lot longer and more often than it needs to. The market doesn’t care that you spent too much for the neighborhood. In addition, over-rehabbing a unit isn’t going to give you much more than market rent because of the neighborhood. If people have more to spend than the typical rental in a neighborhood, they’ll rent in a nicer neighborhood, where they’ll not only get a nicer house, they’ll have nicer neighbors.
Mike
Justin, Mike,
Thanks for the advise. I will take your advise and make some necessary adjustments. And you are absolutely correct the market sets the rent not the landlord. In my research I have found the average rent in the area to be around $450.00 for units in poor condition. I have lower the rent down to $575 just this week. I understand the section 8’s max for the area is $550. Again, thanks
Bonchie
THANK YOU TO ALL!
I was so busy this week that I just now checked back. I have a property manager showing it and advertising, but I did a huge push on Craigslist. Seemed to help because it finally rented on Friday for $25 more per month than I thought and deposit was an extra $50.
So I am happy about that.
And because I don’t live in my rental market, I need property managers to handle it all, but I guess me helping advertising is one thing I can do!
joshuahost - I would love to buy you coffee and have a talk sometime. If you are willing to share…
Thanks!