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Updated 5 months ago, 06/27/2024
Seeking Advice on Renting Newly Renovated Home in Akron, OH (44306)
Hello,
I recently closed on a newly renovated, 900 sq ft single-family home with 3 bedrooms and 1 bathroom in the 44306 zip code of Akron, Ohio. I initially listed the property for rent at $1100 but had to reduce it to $1000.
Unfortunately, the only serious applicants I've received either have a criminal history, poor references from previous or current landlords, or have faced evictions in the past three years.
With almost two months of vacancy, I am growing increasingly concerned.
Should I consider lowering the rent price further, renting to these concerning candidates, or pivoting to a short-term or mid-term rental strategy (considering I live out of state)? Any advice is much needed and highly appreciated.
Thank you!
I know nothing about the area, but that's a tiny square footage for a 3 bedroom. Have you seen the completed home in person? Are you sure there isn't anything left undone?
You could market it as a two-bedroom with an additional office/den. Two people working full-time making $10/hour should be able to afford it at $1100/month. And if they are looking for a one bedroom or two bedroom, they will be pleasantly surprised at the extra room. Marketing it as a three bedroom brings in a family with two kids or group of three roommates, and it's way too small for 3-4 people.
How's the STR market in the area? It's crucial to check at actual listings to see if they are getting filled or they sit vacant.
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Quote from @Rereloluwa Fatunmbi:
Hello,
I recently closed on a newly renovated, 900 sq ft single-family home with 3 bedrooms and 1 bathroom in the 44306 zip code of Akron, Ohio. I initially listed the property for rent at $1100 but had to reduce it to $1000.
Unfortunately, the only serious applicants I've received either have a criminal history, poor references from previous or current landlords, or have faced evictions in the past three years.
With almost two months of vacancy, I am growing increasingly concerned.
Should I consider lowering the rent price further, renting to these concerning candidates, or pivoting to a short-term or mid-term rental strategy (considering I live out of state)? Any advice is much needed and highly appreciated.
Thank you!
Lower the rent.
What part of 44306? That zip code can vary greatly.
Quote from @Rereloluwa Fatunmbi:
Thought this may be the case. I have a few small 3 bed ranches in 44306. They are go for $1100 but they are better located. Yours is in a worse area. My recommendation is try to find someone through AMHA (Section 8). List the house on AMHA's home search. Better shot at getting the rent you want and maybe a better quality tenant.
Or drop the rent and wait out for a quality tenant but no matter what you do do not sacrifice tenant quality.
Hi, yes you should consider reducing the rent. Thanks!
Probably cut it to $850/month for such a small place.
I have 22 units in 44306. Send me a zillow link and I might can give you suggestions. In that area, owning only one property, I'd consider section 8. HUD 'Fair market rent' for 44306 is $1230 all utilities included so you ought to get 950ish from section 8 if you don't supply any utilities (Hud small area fmr is 40th percentile rent in the market). A couple months ago I got 975 market rent for an 820 sq ft 2 bedroom in 44310. Your problem with that property is neighborhood, not size--- that's right around the corner from Joy Park Homes.
Quote from @Jill F.:
I have 22 units in 44306. Send me a zillow link and I might can give you suggestions. In that area, owning only one property, I'd consider section 8. HUD 'Fair market rent' for 44306 is $1230 all utilities included so you ought to get 950ish from section 8 if you don't supply any utilities (Hud small area fmr is 40th percentile rent in the market). A couple months ago I got 975 market rent for an 820 sq ft 2 bedroom in 44310. Your problem with that property is neighborhood, not size--- that's right around the corner from Joy Park Homes.
When you have the best product at a given price point you can shouldn't have to wait for the best applicant at that price point. Two months at an "affordable" price is a long time. The market is giving you feedback. Unfortunately the neighborhood can outweigh the product, which in this case it looks like that is what is happening.
I would recommend, lowering the rent or finding a section 8 tenant.
Thanks a lot, everyone, for your advice! Instead of lowering my standards on background checks, I waited a bit longer for the right tenants just like you suggested. After about 2 months of waiting (and paying mortgage), I finally rented it out for $1000! This means I cash flow $462. One thing I did differently, was not just depend on my realtor to get the house rented. I also advertised on facebook market and got a lot of interest. But I have a new concern.
Interestingly, this original question and your responses were featured in David Greene's BiggerPockets episode #969 at 20.33 min mark (https://www.youtube.com/watch?v=5yLr4ktCtqY&t=1807s).
David and Rob advised that since I'm in a bad location, I should consider selling the house and buying in a better area judging by the long time it took to get a tenant. I purchased the property in March for $81,500, and the appraisal value is $87,000. My PITI (total monthly expenses) is $537, and it is now rented for $1000. Cash-on-cash return for this home is 20.50% and the estimated time to recover original cash invested will be 4.88 years if rent remains the same and no major expenses occur. The numbers still look good to me (especially since I have not even factored in possible rent increase by renting to section 8).
But David and Rob are experts, so I don't want to dismiss their advice. What do you guys think? Should I sell this property?
More details:
Location zipcode: Akron, 44306
Quote from @Rereloluwa Fatunmbi:
Thanks a lot, everyone, for your advice! Instead of lowering my standards on background checks, I waited a bit longer for the right tenants just like you suggested. After about 2 months of waiting (and paying mortgage), I finally rented it out for $1000! This means I cash flow $462. One thing I did differently, was not just depend on my realtor to get the house rented. I also advertised on facebook market and got a lot of interest. But I have a new concern.
Interestingly, this original question and your responses were featured in David Greene's BiggerPockets episode #969 at 20.33 min mark (https://www.youtube.com/watch?v=5yLr4ktCtqY&t=1807s).
David and Rob advised that since I'm in a bad location, I should consider selling the house and buying in a better area judging by the long time it took to get a tenant. I purchased the property in March for $81,500, and the appraisal value is $87,000. My PITI (total monthly expenses) is $537, and it is now rented for $1000. Cash-on-cash return for this home is 20.50% and the estimated time to recover original cash invested will be 4.88 years if rent remains the same and no major expenses occur. The numbers still look good to me (especially since I have not even factored in possible rent increase by renting to section 8).
But David and Rob are experts, so I don't want to dismiss their advice. What do you guys think? Should I sell this property?
More details:
Location zipcode: Akron, 44306
Do not take general statements as gospel. People invest in all classes of neighborhoods and do just fine, as long as they know what they are getting into and have proper expectations.
Your COC is 20% if you have no other repairs, vacancy, etc, which over time you will. So the long term average will be more important, but you will not know that for awhile. If the new tenant is gone in a year and you have two months before you get it turned back around (with additional repair costs), then that is a different story.
If you are satisfied with the current state of that investment, no need to sell just because you heard it on a podcast.