I can't find renters for my townhouse in Atlanta, GA

[Yoana Yordanova]

Hi everyone! Me and my fiance had to move to another state, and decided not to sell our townhouse, but instead try to rent it out. We hired a management company, to help us with this, since we have no experience and we live in another state. For the past 7 months of the property being on the market we only got 3 inquiries, 1 submitted questionnaire (which I guess is a survey before the application meant to vet renters, before they pay for application, is what I am told by management company). We've been pushed to lower the price by the management company every month, which we did. Now we are asking for $1,895/mo (which is what we pay for mortgage), for our 2 bed 2.5 bath townhouse, which is recently renovated, with fenced back yard, located in right between Kennesaw & Acworth, GA. We've been checking comparable townhouses and even apartments, and all rent for $1,850 or higher (up to $2,100) in the area. We don't know what do to anymore. Any advice and input is appreciated. Thank you!

[Kevin Sobilo]

@Yoana Yordanova, a few thoughts:

1. Rentals are about function more than form. So, your competition aren't just nice new townhomes but any 2 bedroom rentals in nice condition with similar amenities. When I search zillow I see 2 bedroom rentals in Acworth from $1300-2000. Kennesaw looks a little higher so, you may be more in the middle of the range there.

2. Your PM's process to find tenants may be geared toward time efficiency for them. Their questionnaire to pre-screen potential applicants meant to save them from wasting time showing the property to unqualified people. So, the number of inquiries will be understandably lower with that approach and intentionally so.

When managing my own properties, I take the OPPOSITE approach to save time. I schedule 2 open houses per week and ANYONE can come. No pre-screening. My time is rarely wasted since there is almost always at least 1 qualified person showing up.

Different approaches, but both should work just fine.

3. Why did you decide not to sell your townhouse when you moved?

If you lived there 2 of the previous 5 years any profits from a sale would be exempt from taxes up to $250k for a single person and $500k married filing jointly. So, it could be an opportunity to pocket TAX FREE profit.

4. Do you plan to buy more rentals? I always suggest people own at least a few rentals. When you only own 1 or 2 you never become proficient with handling them and because you only have a small number there are more ups and DOWNS!

You will barely notice when things are going well for several months, but when things then go poorly you will be able to think about nothing else! When you have several rentals the other performing rentals cover everything and you don't feel the stress from the one nonperforming rental. That allows you to stay stress free and better able to cope with that situation.

5. Have you examined your "value-proposition" for a tenant? Do you offer what they want/need? Do you allow pets? Do you include a washer/dryer (which many rentals don't)?

6. Your current asking price for rent is equal to your mortgage. So, you will be losing money. You still have to pay the PM. You may directly pay some municipal utilities as in most places those become liens if unpaid. In addition you need to budget for maintenance/repair, capital expenses, and also to cover the vacancy/turnover the next time a tenant leaves you.

So, you may want to look at what that will add up to as you make decisions because covering the mortgage is very different than "breaking even".