Unit still vacant, Should I lower rent?

Question

Hello BP family,

My rental has sat on the market for two weeks now. It is a unit in a quadplex that is 2br/1.5 bath listed for $700. According to my PM things are slowing down with people going back to school.

The comps around me are $700, $645, $610, $700, $750, $750 (these are those that are listed for rent on hotpad), they are all units as well.

My unit was posted 2 weeks ago and the first week I got the following:

Week 1: 2 showings, 8 calls, 32 email, and 0 applications

Week 2: 1 showing, 3 calls, 22 emails, and 0 applications.

This is my first rental and I am getting very concerned, especially when I hear that people don't move much during the fall. Should I try "for rent sign", this is not the best area "C" class, so i'm worried about possible break-in.

How much should I lower rent by? from $700 to $685? We just listed it on facebook and craiglist today.

Michael S. · Answer

Hi Robert,

Perhaps a reduction to $695 would help. A new price can sometimes perk up interest and looks much less than $700.

Here is another tip that worked well for me:

My property manager had one of my rentals sitting on the market for over a month, so I took matters into my own hands.  I raided my personal home for home decor and brought these choice pieces to the rental home.  I spent the day freshening up the home, adding home decor and adding a few touches such as adding little hotel soaps and shampoos to the bathrooms and rolled white towels. For the kitchen I added a dish cloth, two wine glasses, a bottle of non-alcoholic wine and a Ikea metal fruit basket.

The end result was that we had two applications that weekend.

I've tested this technique on Class B though D, and it works.  On the D class I don't bring my personal decor (since it may be stolen) but I still add the inexpensive items like the rolled bath towels, the wine w/ glasses and dish towel in the kitchen and some flowers planted near the front door (even though they would quickly kill them after move-in)

Years ago, in two different events, I have had rentals that sat for a month with little interest.  In both cases I had a friend call the property manager as a potential interested applicant and in both cases the calls were not returned.  Both of those property managers were dismissed. ;)

Good Luck!

Herndon Davis · Answer

1-Take control of the marketing. If you PM doesn't like, tough. Replace him2-Consider a small reduction in price3-Old fashion techniques like putting up For Rent signs around the neighborhood work well.4. Craigslist definitely.  I wouldn't pay for Facebook adds even if directly targeted.  You should post, have friends post, have local schools post and send link directly to your Craigslist posting.

Joe Scaparra · Answer

This is so frustrating for me to read through this!!!!  STOP! You want help, link your ad so we can critic it!!!!  Now a few comments.

Your rent is $700.  Your tenant quality is low just because rent is low, but you should get plenty of interest.  So if your showing the property and you're not getting any bites then there is something wrong with your property.

Also, get rid of your property manager and replace him or her with YOU!!!!  No one will do a better job than YOU!  Also when you get a bite, screen and show within 12 hours or the likelihood of losing them is great!

Take EXTREME PRIDE in your property.  Make it the best in the neighborhood.  When someone walks in, you need to hear them say "WOW".  I generally show my properties to one person, they usually take it!  At $700 rent you are not losing tenants to cheaper rent; if you are you don't want them anyway.  There is something not appealing to your property and YOU need to show and sell it! Cheers.

Kenny Dahill · Answer

@Robert Hernandez, yes September is traditionally slower.  Doesn't mean there aren't renters though.

What's your monthly basis for mortgage/expenses?  Occupied is better than vacant; obviously.  I don't thinking lowering by $5 will all of a sudden generate a lot more traction.  Your best bet might be lowering to $650-675 and trying for a 2-year lease, that way you minimize vacancy next year.

And absolutely you should take control of your marketing.  This is clearly stressing you out, take action and don't let the PM give you any excuses.

Austin Works · Answer

@Robert Hernandez your rent really depends on your competition in the immediate area. If your property is slightly nicer than those around it and you are asking for mid-range rent, you do not need to adjust your rent. If your property is not as nice as those around it, then you will need to be at the lower end of the rent range for the area to attract tenants. I would recommend posting on Zillow, Craigslist, HotPads, Facebook - everywhere. And yes, definitely a "for rent" sign. Your property manager may have the mindset of showing the unit to only highly qualified potential tenants (which is appropriate for them to do unless you tell them otherwise), while you may be open to slightly less qualified potential tenants for the purpose of filling the unit faster. Be sure to communicate your goals to the PM so they know what you want.

Michael S. · Answer

Adding a "For Rent" sign with price and contact info should help.  The renters who would be most comfortable with a C class rental, are those who live in that area.   I had one property manager advise me not to put up the "For Rent" sign since it would encourage break-ins, but sometimes in the C and especially the D class, they break-in regardless of the sign.

See if you can increase your online advertising venues.  Craigslist is good but your property manager should be able to add your listing to the MLS as well as websites such as Hotpads.  My property managers hate Craigslist but it has worked well for me.

A new price and fresh new add can help.  Try some new photos and keep in mind lighting (not too heavy on the shadows).  I also use photo enhancement services such as Box Brownie to improve a photo for a few dollars to get that twilight setting.

You may spend a little more money on advertising and staging but if it rents a few weeks or a month early, then your effort will more than pay for itself.

Austin Works · Answer

Are you taking the calls and handling the marketing? If so, it can be a matter of just converting more of your leads to actual showings. Give nothing more than the bed/bath count & rent price over the phone, and recommend setting up a showing of the property. On the flip side, qualify anyone before showing the property so that you don't waste time on someone who won't qualify anyway. Facebook usually gets the phone ringing more than you want it to, so you should find a tenant fairly quickly at this point, assuming that your property is as nice as those around it.

Michael P. · Answer

@Robert Hernandez Run a special half off first months rent

Robert Hernandez · Answer

@Austin Works I do not handle the calls and or marketing. My propery manager does return calls. But what else should I check for?  I sure hope that facebook attracts alot more attention.

From what I told you, should I lower the price? It has been on the market for a 15 days now And install "For rent sign"?

Is september a slow month? Should I be worried?

Robert Hernandez · Answer

@Michael S.

That is good advice. In regards to lowering the price, should it be a completely new ad so it doesn't show the price reduction? Also, should I not reduce it more than $5 since it has been two weeks. this is my first vacancy. Where do you market your ads. And how do you feel about a "For Rent" sign in C class area?

Should I be worried about the other rentals in the area?

I like the piece about the home decor, I am going to buy some item this afternoon and install them. Thank you!

Unit still vacant, Should I lower rent?

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