Where are the tenants!!!?

Question

Hello,

I currently have a vacancy and can't believe the lack of tenants this time of year!

In the past I've always had the property turn over in spring/summer.  1 or 2 craigslists adds and my email box is full.

This is the first time I've had a turnover in the winter and I'm just amazed at th lack of people responding to adds.  I've always heard things are slower in the winter, but this is multiple craigslist adds and only 2 responses.  I'm not even getting the normal "I have 2 pitbulls and don't have a job" emails.

Any tips or anything extra that you do to attract the few tenants that are available during this time of year?

Any thoughts are much appreciated!

Joshua Dorkin · Answer

Have you guys considered winter move in specials or any other incentives other than competitive pricing?  Obviously you'll want to plot it out, but people always love offers . . .

- Free TV at move in
- 1/2 off first month
- $25 gift card a month to Starbucks, Target, or anywhere else

You name it.  If your incentive or bonus is say 50% or so of your rent, it may sound far better than just offering half off.  There are countless other possibilities . . . I just wanted to throw those out there.

Oh, and definitely don't just take a crummy tenant because you're desperate -- that's a fast way to an eviction!

Aly W. · Answer

Josh is absolutely right - I've had calls from tenants asking about paying the deposit in installments. That screams "I can't manage money", "I don't have any money", and "you'll never see that money". No thanks.

I do offer incentives, right now it's a Best Buy gift card.

We currently have 2 vacancies, one is due to a closing on Nov. 30. We'd been under contract for this short sale condo for a year, and that's when it finally closed. The other is an SFR in a low/no income area and I had no trouble renting it 2 years ago this same time of year. The tenant was excellent, but had her 3rd child recently, and being single, couldn't afford to stay any longer. Since then, it's been people wanting the house who *we* don't want. It's been vacant 6 weeks and will possibly stay that way until January.

But an eviction/difficult tenant is far worse than a vacancy, so we'll just have to wait it out.

Joshua Dorkin · Answer

NEVER take a security in installments . . . if a tenant can't afford your security deposit, you're probably going to look at problems paying each month as well.

Just because other landlords are doing it doesn't mean that it is a good idea.

Madhu Prabhakaran · Answer

I agree december is getting to be a tough month. Although I had two tenants going through the entire application and credit process and when they were approved and I was about to discuss lease they got cold feet. Not sure why .

There was one lady wanting to rent as soon as my current tenant moved out but she had a large dog and I passed though everything else checked out. Now on hindsight I am thinking did I make a bad move may be I did. December is really a tough month, I am sitting pretty and I agree eviction vs vacancy , vacancy always wins.

I really love this forum it helps in getting ideas and it is kind of we are all on the same boat kind of feeling .

General question is legal to introduce a lease performance bonus in the lease agreement. I had in the past some very ideal tenants and thought I can pass on something towards the end of the lease and when they sign on to a renewal.

Steve Babiak · Answer

There are a few scenarios where good people will move in this time window.

The place they are in is getting foreclosed (and they are tenants); their place had some disaster (natural or fire); something renders the house unsafe or uninhabitable (think mold or lead paint issues), and landlord refuses repairs;  crime spree in the neighborhood the are in; expecting a child shortly and need more space; change of jobs.

There might be some other scenarios ...

Scott W. · Answer

it's been said an eviction equates to 6 months rent. just not worth it; save yourself the trouble.

i would never do a no deposit either but i will share a story. a guy i work with had a short sale completed on his primary. he needed a place to rent. he knew a guy who had a property where it was vacant. the LL took him with no deposit. he has been there for 5 years & counting.

now, if there's any damage, he's screwed but I think the LL took him because the economy was falling apart & he saw the tenant was in a pretty safe industry.

Tamara R. · Answer

You can pretty much write off December--people just aren't looking to move between Thanksgiving and Christmas.  I have heard of the some landlord's offering $99 move in specials (but only to very well qualified tenants) just to get someone in place.  $99 moves you in, then tenant is allowed to pay security deposit in installments. ONe hurdle this time of year is not being able to come up with money due to overspending on the Holidays. In Feburuary, tenants are getting their tax refunds and this provides some opportunity as well.  Be sure to get them before they spend those refunds. . . .

Steve Babiak · Answer

I don't like to offer incentives payable in the first month - I like to make incentives payable later in a lease term.  I want them to first demonstrate good performance.

If you do annual leases, I would set the end of the first lease to be June ( + or - one month) to "coincide with the school year" ( but really better times to find tenants since most are looking then).  I will offer them a reduced rent during that entire short term lease as a possible incentive ($25 or $50 per month), and I will tell them that it is only short term and to EXPECT the market rent at renewal.  So that small incentive is the only one I'll do early in the lease term.

Sometimes a prospect will come along and really want something simple.  I had one who wanted a fluorescent fixture installed over the laundry area - no problem since it cinched the deal.

Steve Babiak · Answer

Not a new problem:

http://www.biggerpockets.com/forums/52/topics/68304-finding-tenants-this-time-of-year

http://www.biggerpockets.com/forums/52/topics/60383-does-anyone-ever-have-problems-getting-tenants-in-place-

http://www.biggerpockets.com/forums/52/topics/53576-worst-month-to-find-renters

http://www.biggerpockets.com/forums/52/topics/72424-best-months-for-new-renters

http://www.biggerpockets.com/forums/52/topics/1824-finding-a-tenant

http://www.biggerpockets.com/forums/52/topics/17767-are-there-less-tenants-out-there-or-is-it-my-imagination-

Chris Martin · Answer

I agree with Josh... get creative with the incentives. Example: pay the teannt's heat for the first two months of the lease. You are in Minnesnowda, right? (In the lease, just make sure you cap the amount of the utility you pay to $150... or whatever)

Where are the tenants!!!?

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