Should I consider taking rental off the market?

Question

Hello,The rental market in my area (SF bay area) has softened a lot. It is not just price and longer vacancy. The worst of it is the quality of tenants. My property (Class A in a beautiful neighborhood) has been on the market for 3 months and though we have had several applications, none qualified (both in terms of financials as well as references that uncovered major issues with past landlords and employers). The rate at which I am getting calls has started to slow in the past 2 weeks and the people who called are very sketchy, arrogant and unqualified (based on the prescreen). I expect things to slow even more as we approach Thanksgiving and December. I am debating whether I should take it off market until January. I am thinking that perhaps the market will clear from all the left-over candidates who think we are desperate because the house has been on the market for a while (We are not desperate. I don't mind the long vacancy. We have the funds to cover it and the house cash flows well when rented, not to mention the property appreciation in my area which definitely calls for an empty house rather than rented to a bad tenant). On the other hand, we found one of our past best tenants in December and I don't want to miss the opportunity of a good tenant who is looking even in the slow period. Any thoughts?

Theo Hicks · Answer

I would reduce the rental rate. As a % of something is better than 100% of nothing.

Anthony Wick · Answer

If you pulled it off Zillow for a couple days, and then reposted, would it reset the date that it is posted? If the issue is that you think you're getting worse tenants because they think you are desperate. I'm not so sure that it works that way for rentals.

Katie Stewart · Answer

Hi Constantia! Are you only marketing on Zillow? Maybe greater exposure on more listing sites could help with your vacancy issue. There's free software out there that will perform market syndication (as well as things like online applications and tenant screening) that you could take advantage of. If you need any recommendations, please don't hesitate to reach out! :) Hope your vacancy gets filled soon!

Michael Strachan · Answer

I agree with both @Theo Hicks and @Anthony Wick. If you take it off the market you are guaranteeing that you won't be finding a good tenant. Rents definitely tend to be higher in the summer time, as families settle down for the school year, etc, so I would consider maybe getting a decent tenant at a lower rent on a 6 month lease so that it comes back on the market during peak season. That way you can reset yourself to renting 12 month leases at peak prices. Also, I'm curious how applicants would even know how long it's been on the market. Are you using a marketing platform that displays days on market?

Lynn T. · Answer

@Amit M.What is the detail of your rental home, price point, neighborhood. I am helping a family look for something right now. They want to work on their home's renovation and look for 4-6 months lease.

Mary M. · Answer

I would take it off zillow for a few days then reactivate. Also try craigslist. Finally maybe try a rent discount - like 1/2 off second months rent

Amit M. · Answer

Are the other homes near by getting rented out? I think you can lower your rent more if it’s been 3 months. it’s not indicative of lower end tenants. Quite the opposite, a good tenant will realize it’s a good deal, and will be interested.No doubt nov/dec suck for rentals! I just rented out a 3BR in San Francisco. I had it at an attractive rent (but not silly low), and got a good tenant in 3 weeks, while my competitors are still languishing on the market. As mike also suggested, I did a 6 month lease to reset the renewal for the summer. It’s a great idea!Do you advertise on Craigslist? It’s also very good IMO, and you don’t have the BS with resetting the listing date. With Zillow, hotpad, etc. I got burned last year when (again) I had a November rental. This one didn’t go so well and by February the list date was looking bad. I had tenants ask me why it’s on for so long. So here’s what I suggest: you need to remove it for 30 days for it to reset. Basically from thanksgiving to New Years will be the absolute sh!ts for rentals. So keep it chugging along on CL, but remove it from the other platforms for 30+ days to reset. Then after new year, bang, you’re off with a refreshed ad. I seriously suggest your drop the price, and see if you get a decent tenant. And as you know (and most important) no tenant is ALWAYS better than a lousy tenant! Especially in tenant friendly CA, having a loser run amuck in a $1 mil+ home is no bueno!my2c

Constantia Petrou · Answer

Yes, the issue is that I think that I may be getting worse tenants because zillow shows the house on the market for a while and they think we are desperate. However, taking it off zillow for a few days will not help. Zillow keeps the history and does not reset the "clock". In any case I decided to keep it on and keep screening until the right high quality tenant comes through. Thank you all for your input

Constantia Petrou · Answer

Re Michael's comment- yes, we are listed on zillow, which shows the date the property was first listed. Thanks for your suggestion but our strategy is not to go for so-so tenants or for quick turnover just to get the property filled. We are in a good financial position.Brad, thanks for the input. Yes we will not settle for anyone sub-par. So-so tenants are very costly (we have found that from experience) both financially and in terms of time commitment and stress. Great tenants are definitely worth the wait. Our property is fairly priced and in much better condition than the competition. Our marketing material is high quality with professional pictures and the feedback we've had from viewings has been "wow". It's just that in soft market conditions, sub-par candidates feel they can push the landlord around and "force" their way into our property by hiding what does not meet our criteria, which of course upon screening it all gets revealed, or in some cases even by threatening.

Brad Braun · Answer

Best to keep in listed 100% of the people who don't see you listed won't rent your property. Since you're in a good position financially, just be picky. Don't settle for sub-par tenants. In my opinion, I'd always keep it listed. Perhaps re-look at current market conditions and make sure you're priced competitively along with the amenities and style that your competition is offering. Make sure you're marketable and you will find a good renter soon enough!