When to lower rental listing price?

[Levi Perl]

How many showings a week is considered good? Meaning that the number of showings show you have it priced well? I have seen many say “3-5 showings a week is good”. However, does that include people who wouldn’t qualify? I get many requests for showings, but when I ask them to first confirm they qualify (3X income, etc.) they don’t respond.

Listed 22 days. Have done 2 showings, with one more scheduled for tomorrow. Got 5 applications. Only one applicant qualified but they said in the end the house didn’t have everything they needed. The 2nd person really liked the house and even mentioned how nice the rehab was, relative to comparables they have seen. They made it like they were ready to apply, but did not apply yet. That showing was yesterday  

Would love if you give feedback on actual listing. Link here.

Thanks!

[Trent Davis]

@Levi Perl what are the limiting factors of why one person that has viewed it is qualified to live there?

[Levi Perl]

I think I have a pretty standard screening criteria. I ask they first confirm the below before showing. Here it is 

Applicants must:

1. Show gross monthly income equal to 3 times of rent (between 1 or more adults).

2. Be currently employed and be able to provide 3 most recent months of past paystubs or other income documentation.

3. Show a credit score of 600 or more (negotiable).

4. Have a decent rental history, including no past evictions.

5. Have a clean criminal history (excludes minor misdemeanors and traffic violations).

6. A showing is required as part of the application.

7. Documents regarding your pet(s), if any: Photo; vaccine records; proof of license with Animal Services; contact info of vet; renters insurance showing pet coverage.

8. Pet deposit is $250. Pet rent is $50/month per pet.

[Nathan Gesner]

Thanksgiving and Christmas are the slowest time of the year. People are busy with the holidays, and very few are focused on moving. 22 days isn't ideal, but it's not bad for this time of year. I think you'll see things pick up in January.

Some other tips:

1. put the toilet lid down.

2. Put the dryer in place and put the door on. 

3. Don't use so many pictures. A close-up of the stovetop or the back steps won't sell the house. The purpose of marketing is to attract an in-person showing. Just like a stripper, you should leave them wanting more.

4. Some of your requirements come across harsh. Why mention the tenant will be responsible for appliance repair above ordinary wear-and-tear? That's already in the law and applies to floors, windows, lawn, etc. Why set a 600 credit score if it's negotiable? Why do they have to notify you if they will be gone for more than 24 hours? Your ad should require "proof of income" not proof of employment. Someone could have income from a pension, disability, investments, or even Section 8 without being employed.

I'm not taking the time to study your market, but the ad looks pretty good. I suspect it's because you are competing with the holidays.

[Levi Perl]

Thanks Nathan. I want them to notify me if they will be absent for an extended period of time so that the property is not seen as abandoned by anyone looking to do a crime, and so that I could check on it. For example if they leave in the winter, I need to ensure the pipes don’t freeze.
Is there any amount of days (1, 3, 7?) a tenant wants to be away that you require them to notify you of their departure?

[Trent Davis]

@Levi Perl, is there a way you can ask the people who have not applied why they didn’t?

[Levi Perl]

@Trent Davis, what would that help? Whatever the reason, it has nothing to do with me, or anything I can influence. Anyone who actually saw the house liked the house, or the house didn’t have everything they needed. For the one person who liked the house and said they’d apply, but did not, I would assume either they will apply, or they never actually qualified form the start.

[Trent Davis]

@Levi Perl it may just be a misunderstanding that can be clarified but I think 2-3 showings a week is a good amount. I just wanted to make sure there wasn’t a limiting factor of showings or interest.

[Bill B.]

Of course you want to ask why they didn’t apply. Did they find a better place, a cheaper place, a better and cheaper place? Did they see something that disgusted them? Did a neighbor or the neighborhood worry them?

What can it be other than pricing or marketing?

To me 22 days is a very long time. You’re about to be down 8% of your rent due to vacancy. So if lowering the rent 8% would have filled it you would have been ahead. If you go another month then 16% lower would have resulted in more income. 

If you aren’t using a PM have you considered it? There are only a few outcomes. They tell you you’re asking too much rent (you lower rent, avoid vacancy and make more money) ,your marketing is bad (they take new pictures, advertise in different places, change wording, whatever, and get a tenant saving vacancy.)  your pricing is good and your marketing is good, it’s just a slow time and even lowering rent won’t help. (You know you’re on the right track and you insure future leases end between March and July by varying the length of the new lease.)

Good luck. 

[James Wise]

Quote from @Levi Perl:

How many showings a week is considered good? Meaning that the number of showings show you have it priced well? I have seen many say “3-5 showings a week is good”. However, does that include people who wouldn’t qualify? I get many requests for showings, but when I ask them to first confirm they qualify (3X income, etc.) they don’t respond.

Listed 22 days. Have done 2 showings, with one more scheduled for tomorrow. Got 5 applications. Only one applicant qualified but they said in the end the house didn’t have everything they needed. The 2nd person really liked the house and even mentioned how nice the rehab was, relative to comparables they have seen. They made it like they were ready to apply, but did not apply yet. That showing was yesterday  

Would love if you give feedback on actual listing. Link here.

Thanks!

 I'd see how next 2 weeks go before lowering the price. Nov / Dec are the dead season. Nobody moves during this time.

[Levi Perl]

Ok, I see its normal to ask those who came to showings why they didn't apply. I appreciate it.

I have considered a PM. But they take first months rent and then 10% every month on top of that! I think I can do a good enough job of listing it. See Listing Link here.

I am attributing a lot of the "slowness" to the season. 

[Caleb Brown]

It is the Winter time so it's a slower time but I think you are overpriced. You can probably hold out for the right renter but you might be waiting a couple months. You are in Blenheim area which is trending up but not as nice as Troost or West. I would think it would rent well in the 1,350-1,450 range, above that it will be tougher. Rehab is nice so I don't think that will be a concern, this is also off street parking so ones with garage will be favored more if you are priced the same. 

[Kristian Sexton]

@Levi Perl 

There are definitely a lot of factors at play here, especially considering the time of year. If this is happening in real time and you’ve shown the property twice in 22 days during December, I wouldn’t necessarily find it concerning. This is typically the slowest time of year for tenant placement, at least in our local market. From November 1 to January 31, we usually see higher Days on Market for most properties.

It’s also encouraging that you’ve had some interest, even from those who may not fully qualify. While those inquiries might not result in tenants, they can still show the property is appealing and could be an indicator of future traction.

The listing itself looks great. My rule of thumb is the more details you include about the property the more quality leads that you obtain. Some tenants even sort based on sub-structure so just making sure all of the details are as precise as possible. 

Keep in mind that a slower pace is often normal for this season, and things usually pick up as we move into spring. Wishing you the best of luck in finding the right tenant!

[Brian DeMasi]

@Levi Perl

Let me start off with, I am completely new to all of this but not new to business in general. I’d definitely want feedback after the showings, as you’d get first-hand information from prospective renters. If multiple people chose another house for the same reason or avoided yours for the same reason, maybe you can pivot a little to prevent that issue being a factor for future prospective renters. 

I personally dropped the zip code into Zillow and looked at your listing on a map and others nearby. There’s a lot of vacancy in the area with some listed for as long as two months. One that stands out to me is 1801 E 69th Terrace. 3/2 with similar square footage. While I feel it’s not as nice as yours, it’s also listed for nearly 30% less, with similar qualification requirements and pet policies. 

[Jill F.]

I mean you went on the market two weeks and two days before Christmas. Probably the.worst.possible.time to look for a tenant. I'd give it the first two weeks in January and see if I got any bites before I dropped my price or really started worrying. People are going to start thinking about spending their tax refunds in the middle of January.

[Levi Perl]

@Jill F. I especially appreciate your and others’ assurance around this being the worst time of the year to find a tenant and not to sweat the slow movement too much.
I’m curious if anyone would recommend to not post a listing at this time of the year, as it hurts the listing by sitting and you lose a lot of the “New Listing!” value because you have much less eyes seeing it if posted in these few weeks.

[Caria Mitchell]

We are experiencing a shortage of qualified applicants, I’ve noticed non-conventional applicants vs qualified applicants that don’t have a voucher or some form of subsidy. If you are receiving 3-5 per week that’s not bad, considering the price is what most individuals look for when looking to rent. Lowering it now might not be necessary. I would consider offering an incentive like a free application fee, or $50 off first month, free parking for 3 months etc. Hope this helps. 

[Nicholas Mann]

I am experiencing similar issues with time of year being the main culprit. From what I am told, hoping the next few weeks really pick up and I can get my vacancies rented. Best of luck 

[Stuart Udis]

@Levi Perl As other have noted, most decide not to move this time of year unless they absolutely have to and that tenant pool is small. I generally try to put my October through January lease starts on 18 month initial terms to better align with more favorable leasing periods when the units come back to market. Looking ahead, once you secure a tenant, perhaps this is something that should be explored to make the next lease up easier.

Also, @Caria Mitchell raised an interesting point in saying: We are experiencing a shortage of qualified applicants, I’ve noticed non-conventional applicants vs qualified applicants that don’t have a voucher or some form of subsidy.  Usually when a landlord cannot find qualified tenants but are getting a fair amount of inquiries there's an underlying real estate problem and the qualified tenants simply do not want to live in that location. That appears to be the issue Caria is facing.  Could that be an issue you are facing as well? Especially since you are getting a fair amount of inquiries.