Tenant Leaving - When to relist unit that needs to be turned?

Question

Good Morning BP!

So I closed on a 4 unit last week that currently has some very long term tenants (16+ years) on a month-to-month lease. Their rent is quite a bit below market value, but I was going to feel a little guilty about raising it and/or getting them out because they are elderly.

In a good news/bad news situation, on my very first meeting with the tenant, she told me of her intention to find another place to live - her current unit is a 2nd floor walk up, and she doesn't want to do stairs anymore. She's currently looking for another place, and thinks she'll be out in June.

The unit obviously needs a pretty heavy turn (16 years of low-grade hoarding) so I'm hoping to have it ready to occupy at the beginning of July.

Here's my question: when should I list the unit on Craigslist/Zillow? I absolutely can't post pictures of it in current condition - it's not damaged, just full of stuff and dirty. I'm also going to be making some improvements, so I really don't want to put up pictures of it before it's done, which might not be until the middle/end of June.

Do I list it now without pictures? And without knowing exactly when it will be ready? As long as I'm honest about the situation, are there any issues with that?

Any better thoughts about how to handle things? I'm trying to do things better than I have in the past, when I was a lot more 'relaxed' about vacancies, and these are my first inherited tenants as well.

Thanks!

Jeff B. · Answer

Remember, First impressions are lasting ones - - whatever the prospects sees now is what they expect later.

I NEVER show until the unit is in move-in conditions and have many say, "That's a nice and clean apt".

Post your availability when you have the right condition pictures available, so that means that move-out--fix up--pictures--posting--showing is serialized and you eat the month need to complete the get ready.  Just part of the business.

Kevin Harrison · Answer

Im on the opposite side of the fence from David. If the units are not presentable and you are planning on doing some mid level upgrading then I would not show them until they are completed. It would be a waste of time in my opinion because the rents you are going to want will not be justified by the appearance of the unit and most people don't have the vision to see what they will look like.

If anything I would list them towards the end of the remodel as "coming soon" along with a picture of the outside of the building and a picture of the floor plan. This should drum up some interest of people who know they are going to be moving, and shorten your re-lease time as you should have a pool of interested parties by the time they are ready.

Thomas S. · Answer

I would wait till the unit is ready.

As for your comment regarding feeling guilty about raising rents there is no place for emotions when it comes to money. Tenants are a business income source not people you need to invest personal emotions into. You should have notified your tenants the day you took ownership that their rents were going up to market. They have had a discounted ride for 16 years. It's time thay started to carry their own weight.

There is only one reason to be in business and that is to make money, as much money as you can. Jack their rents and save your emotions for issues out side of your business.

Peter MacKercher · Answer

@Jason V. The floor plan posting is a good suggestion but I'd suspect you are going to be waiting until you have finished project pictures to add to your post. Good pictures are probably the most important thing for a successful listing and many people will just ignore posts without pictures entirely. These are the days of Instagram and Facebook status updates, after all. Next in line after having good pictures is having the unit be in the best shape for showing possible -- people really aren't able to imagine a unit after it's been finished and cleaned, from what I've seen.

Depending on your turnover time the leads you get from a preview post might go cold by the time you tap them, especially if there are many vacancies in the area of a similar kind. Your market could be different but that's what I'd expect in my area (St. Louis).

Hope you find an angel applicant, despite that doom and gloom!

Account Closed · Answer

I also agree that it's best to wait until the unit is vacant and all work is done before advertising it.  It's true, people can't see past other people's stuff.  People also can't see past a partially painted apartment.  Learned that the hard way, too.  They worry it won't be ready on time or you won't do a good job, etc.  Or they've heard it before from previous landlords who didn't do what they said they'd do.

And when the ad is posted, people will want to come see it right away, if the market is decent.  I agree that if you post it and it's not ready, then people see it posted again, they'll think something is wrong with it and you can't get it rented.

I also found that there are often tenants ready to move right in - who had good reason to.  At least in Silicon Valley, where I managed apts.  There will be people who just got a job offer and are hoping to move right away.  As long as you vet them, and their employment has been steady and the new local offer makes sense, it should work out.  Not all applicants are waiting to give their 30 day notice.  Granted, you have to really vet someone who's ready to move now, but you may not have to wait 30 days to get the rent flowing.

Jason V. · Answer

...says the guy who blows a vessel every time the phrase "cash for keys" is uttered.

But I do appreciate your input on the actual question, and congrats on 1,000 posts! I just wonder how many of them were spent trying to prove not all Canadians are nice people.

I'm kidding, really Greg - I know you're a sharp guy, and I appreciate your input. I never said I wasn't going to raise rates, I just said I'd feel a little guilty about it. Then again, once I found out the new Infiniti parked at the house was hers (and not the young gentleman's who lives there) any sympathy I had was clear gone.

Bryan O. · Answer

I'm also 100% for waiting. On top of what everyone said (and were absolutely right about), she is elderly, thinks she can be out on time, and is a low-grade hoarder. I wouldn't expect to have the unit vacant and be prepared for her holding over.

Jacob Anderson · Answer

I have to agree that first impressions are important and that we just skip adds that have no pictures posted. Good luck

Kevin Harrison · Answer

Best of luck!

Tenant Leaving - When to relist unit that needs to be turned?

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