Vacant Units Going Into Holiday Season

[Janelle Carlson]

Looking for additional advice on getting my vacant units rented out before the holidays. Here is a quick backstory: College town, not a super-fast moving rental market, but have had 4 units on the market since July with our property management company. Looking back our prices were too high for that type of unit and time of the year. We have dropped the prices and advertised them as 6 or 18-month leases to have them renew in the prime summer months. PM company has posted to all internet sites (Zillow, craigslist, facebook, etc.) and have offered ads in the paper for a fee of $85 per ad. 

Are there any other tips you would recommend for renting during the slow season, or should we just winterize the units and start strong after the first of the new year? Properties are in Indiana.

What has worked for you guys?

Thanks!!

[JD Martin]

A)Price+B)location+C)amenities+D)supply of potential renters = rented unit. So something is off on your equation. 2 things you can control, 2 you cannot. You can control how much you are asking, and you can control what amenities are offered with the unit. You cannot control where it is and you cannot control how many available potential renters there are. Regardless of what you can and cannot control, B,C, and D always relate back to A:

In a hypothetical situation, if you put the unit up for rent for $1 per month, you'd have it rented in 5 minutes. If you put it at $1 million per month, you might eventually find a kook to do it but probably not. If you are in the best area of town (B, location) and are priced 50% below everything else comparable, as long as you have "D" it will be rented in 5 minutes. If you are priced same as everyone else but offer a free gym membership, free lawn care, all utilities included, and Friday back massages ("C") it will be rented in 5 minutes. 

So your trick is finding the right combination of A,B, and C to get D to act. If your prices were too high in the summer - prime rental season - then what leads you to believe they're not too high for winter (dead season) even though you've lowered them? You may have just lowered your prices to what you can get in July but not in December. 

When we have units come vacant this time of year - anything between October and December - we have the lease end on 6/30. Then if they want to reup for a year and they've been good tenants, we put them in a one year lease at that time. We price less than prime season to fill units fast and accept that as "the cost of doing business". Taking $50-100 less per month on a 6-8 month lease is less than one full month of vacancy, not to mention added costs of vacant maintenance (heat, security, etc), so it is a no-brainer.

I would suggest you see what the market rate is *right now* for units similar in location, size, and amenities to yours, and then consider taking 5-10% off of that figure, and go until late spring/early summer with the lease. It will price you better than your competition and stop the vacancy bleeding.