Any tips for getting a SF house rented?

Question

My friend has a house for rent in an upscale suburb of Melbourne, Australia, 2 blocks from the beach. It's a 3 bedroom historic home, 1 bath upstairs with the bedrooms, another full bath outside by the pool. The kitchen was just updated but the main bath is a little dated. Overall it's a nice looking place, but it's not super modern and high-end. It's listed with a rental agent, which is typical here in Melbourne, at a fair market price, but it's not renting. The agent has been getting about 2 people through a week to look at the place, but they don't rent.

Does anyone have any tips for getting this house rented? She's listed it separately on Gumtree (similar to craigslist). The agent didn't think lowering the rent would help (although I personally think it would). She had it rented previously (prior to the kitchen update) furnished but has since emptied the house. Does renting a house furnished help?

What things that have worked for you in the past to get a house rented?

Dean Letfus · Answer

Nancy Australia is a completely different market to the USA, (which you may already know). The only reason a well presented house in Melbourne would stay vacant is rent is too high or management company leasing it is incompetent. It is very, very unusual to have more than 2 or 3 weeks vacancy a year ever in most parts of Australia or New Zealand. Especially in a city like Melbourne.

Jerry W. · Answer

Nancy Capron I dont mean to be negative, as it could be a slow market, but it could be your agent. I have a few small apartments, and a house or two I rented through a realtor, and I noticed that my apartments were not renting as fast as they used to, I got to looking and they had taken over managing another apartment complex about double the size of mine. I went and priced the new apartments and they were like 50$ a month under mine, I talked with the realtor and lowered mine to ten bucks below the level of the new complex and they went back to renting. I also talked with the realtor a bit about how we could cut everyones profits by trying to underbid each other all summer.

Harry M. · Answer

Hey Nancy, I can only speak with any confidence about what is normal in my market, but 2 showings per week sounds really low. I think that's the #1 red flag right there. So, two possible reasons for that: 1) Not enough people know about it - ie. the marketing is not good enough. One good trick to see how well the online part of your advertising is working, is to go to a site that lists rentals in your area and come up with a list of a half dozen or so properties that are similar to yours. Google each of them (and yours) by address, and see how many hits you get for each. That should give you a good idea whether yours is lagging behind in advertising. 2) Enough people know about it, but something is stopping them from pursuing it further. That could be anything from poor pictures that don't show the property off well, to price. I think if you guys get that part down, then you've got a good place to start to figure out what you need to do next. Regarding letting rental agents determine the price: personally I want a bit more control than that. I'll ask them for comps, then sit down and go over them together and make a decision together. I'll certainly consider their advice, but I'm not comfortable divorcing myself from the process. Hope this helps a bit. Good luck getting it rented out. -Harry

Nancy C. · Answer

Tevis Verrett: I loved your ideas about adding value to the rental, I'll definitely pass them along. In general, she and I have let the rental agents set the price, figuring that they know more about the market since they're in it every day (and I'm not going to personally look at all of the properties for rent). I am hesitant to overrule her agent in terms of price. How much faith do we put in the number that rental agents give us? Or does it just come down to whether it rents at the price they set or not? (That seems a silly question now that I've written it - it either rents at the price they set or it doesn't and we lower it.) Does anyone else have experience with letting the rental agent set the rental price?

Tevis Verrett · Answer

Nancy you are popular! Three posts while I was typing mine. This is a game changer. . . she has NOT done her due diligence and you are the best arbiter/judge of the surrounding community, since you are boots on the ground. Market determines price. She needs to come into line with the market. Tevis

Tevis Verrett · Answer

Hi Nancy Capron, Your friend needs to consider the concept of 'value added.' What ELSE can she bring to the table to make the home either more differentiated in the marketplace, or exclusive? Think fully furnished for executives coming into town on a short term basis. Think historic cool factor (was the local brothel. . .) Think a health club membership with the rental. . . Secondarily, think concessions over lowering the lease. (e.g. . . pay 11 months and get the 12th month free-on renewing the lease) I could keep going, tho' I don't want to hog all the goodness, and Jon is spot on! Tell us how it turns out, Tevis

Nancy C. · Answer

Jon Holdman: The market in the area is slow, but other properties are getting rented. She hasn't "played tenant" and looked at the competition herself because she lives in LA. I've done a little scouting for her and I think it's overpriced compared to others. I'll have her make some calls about other properties that are very near her, that's a great suggestion. She's been listening to the agent who doesn't think lowering the price would help (even though that was my first suggestion after looking at similar listings).

Kirk R. · Answer

This worked for me: Set up internet & utilities. Rent each room separately. Have each person pay a flat rate. I get more rent this way but I am also live in the home. I think of it a little bit as a bed and breakfast. Dishes left in the sink etc. I take care of. I clean the place. Also I make sure the AC isn't on with the windows open. I've got 3 great professional roommates and it is more of an experience. But she might want to go in and clean every once in a while to make sure things aren't too out of control. Best Regards

Jon Holdman · Answer

"Price overcomes all objections". What's the market like in the area? Are other properties getting rented and this one just sits? Or is it slow for everyone? Any feedback from the people seeing it? How does it compare to other properties? Has she "played tenant" and tried to look at the competition? Or, at least did some calling?