Harder to Fill 3/2 than 2/1?

[Craig Fitzsimmons]

Happy New Year, all! I’m having a hard time filling one of my units in the Duluth, MN/Superior, WI market. It’s the only 3/2 unit I have, and I’m wondering if it is generally harder to fill 3/2s than 2/1s. I’ve replaced all of the flooring, dropped the price 3 times and my PM still hasn’t been able to rent it. For those of you with 3/2s and 2/1s, what do you see? Thanks in advance! Craig

[Michael Schraepfer]

We rent an awful lot of both sizes here in Duluth. Sounds like it’s in good shape so that’s not it. I’d want to know the location and rate your looking for, but the biggest factor is probably time of year here in Duluth. We do our best to not cycle a single lease between December and March. Less people move in the winter and there are just less people looking, especially for bigger 3+ bedroom units and homes. When we have to find a tenant in the winter it typically goes for 10-20% less, especially on larger units like a 3 or 4 bedroom that would typically have be a family rental. I know today it was -13 with a -37 windchill, I couldn’t imagine moving in this weather! We routinely see a home that rents for $1300+ go for 1150-1200 in the winter and take longer to get a tenant at the lower rate. I would keep trying to find a tenant at a lower rate to get it performing and short cycle the lease, say a 6 month lease at a lower rate. Then renew or rerent in the summer at the top rate.

Hope that helps! Let me know if you’d like a new PM 🤓! We could chat about it in more detail. We’ll get it rented!