Average days on market before unit gets rented?

Question

Hey guys!
I am looking at purchasing a duplex close to a UNIVERSITY. Purchase price 109000, total rents 1350$/month. 250$/month cashflow after all operating expenses.

1. According to my realtor, average days on market before the property gets rented is 45

2.According to neighborhoodscout.com, the area has a high vacancy rate of 14%!!!

14%??? I am concerned about these numbers... Do you guys pay attention to the vacancy rate? Should i be concerned?

Jon Holdman · Answer

I don't think these overall statistics are very useful.  You need to know what to expect for YOUR units.

To determine that, research available units in your target area.  Drive the area looking for signs, look on craigslist and anywhere else where rentals are advertised in your area.  Make some calls.  Find out what's available and the details (this also helps you determine rents.)  Now, keep watching.  Watch for when properties disappear.  Presumedly they're now rented.  Watch for new ones to appear, and call and find out when they're available.  With some diligence and tracking it for a while, you can figure out how long units are vacant.  This also helps you understand exactly what units get rented quickly and which linger.  Hopefully, you can figure out the pattern.

Fred Dray · Answer

Hi Edita

I think 45 days is too long especially if you are near a university.

I managed a 72-unit complex in Glendale Ca and usually had my units rented within 2 weeks at $1650 for 2+2.  Granted Glendale is not as depressed an economy as Vegas.

A 14% vacancy rate is very high.

Check to see what average rent is for units like yours.  Perhaps lowering rent by $50 would get the units rented faster.  Also, what do the units that rent to students charge?

good luck