Too many rentals at the same time in the neighborhood

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Too many rentals at the same time in the neighborhood

Anand Narayanan
Member since 2020 · 11 posts · 3 votes

Hello BPers - I recently closed an investment property (townhome) in a decent community. The builder delayed it by 3 months hence ended up in wintertime rental. It has been a struggle to find the renter with multiple competing units at the same time. As we try to make a short-term rental to get in summer cycles, there are numerous more units coming to be in the market for rentals. I don't know if there are any magic bullets at all other than duke it out as we go along.

If anyone has some ideas not to be in the rat race being available at the same time and driving rents down, please share. Sincerely appreciate your insights.

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Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
4y

I've never seen an area where it was a good rental area, that had too many rentals.  If it's a good area, meaning high cash flow, it attracts both landlords and tenants, and the quantity of tenants willing to pay high enough rents to deliver the higher CF, is what makes it a good area to invest.

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  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    4y

    I've never seen an area where it was a good rental area, that had too many rentals.  If it's a good area, meaning high cash flow, it attracts both landlords and tenants, and the quantity of tenants willing to pay high enough rents to deliver the higher CF, is what makes it a good area to invest.

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  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    4y

    @Anand Narayanan  you incentivize your rental whatever way you can.  Lower rent for initial months. Accept a shorter term rental.  Nov/Dec are not the best in the northeast because people are less likely to move during those months but you can still make your rental the most attractive. Be more responsive, prepared, and available to show then other landlords. While you shouldn't change qualifications this may be the time to test your pet friendliness if you are willing by accepting pets on a case by case basis. 

    3Reply
  • Jai Reddy
    Edmond, OK · Member since 2012 · 456 posts · 270 votes
    4y

    @Anand Narayanan It may be location dependent….is this in the Raleigh area?

    Consider offering a moving van for free

    usage to incoming renters?

    1Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    4y
    Originally posted by @Anand Narayanan:

    Hello BPers - I recently closed an investment property (townhome) in a decent community. The builder delayed it by 3 months hence ended up in wintertime rental. It has been a struggle to find the renter with multiple competing units at the same time. As we try to make a short-term rental to get in summer cycles, there are numerous more units coming to be in the market for rentals. I don't know if there are any magic bullets at all other than duke it out as we go along.

    If anyone has some ideas not to be in the rat race being available at the same time and driving rents down, please share. Sincerely appreciate your insights.

    Drop your price and reduce the term to monthly or no more than six months. It's better to rent at a reduced price of 20% than to sit vacant for two months. Get through that period and then put it back on the market in the Spring/Summer when business picks up and you can rent at market rates again.

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  • Anand Narayanan
    OP
    Member since 2020 · 11 posts · 3 votes
    4y

    Great suggestions! Thank you so much @Joe, @Colleen, and @Nathan!!!

    @Jai Reddy - yes Raleigh area. The market is pretty good but guess wintertime rental is the issue.
    0Reply
  • Andrew FreedBusiness Member
    Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
    4y

    @Anand Narayanan Winter months tend to be the slowest time to find renters. I dealt with in the Boston rental market during December - February even though Boston is notorious for being a strong market. I was unable to rent during these months for the reasons you mentioned above so I lowered the price by 200 bucks a month and found a fantastic tenant (honestly one of my best). Given your situation, I would recommend lowering rents and putting the unit on a short lease. Lastly, make sure that the renewal date of the lease occurs during the spring months which tends to be a better time for finding quality renters. When I list my units in the spring months, I have so many applicants, it becomes challenging even responding to all the inquiries. 

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  • Jai Reddy
    Edmond, OK · Member since 2012 · 456 posts · 270 votes
    4y

    @Anand Narayanan

    Also, if your unit is pet proof, consider allowing small ‘preapproved’ pets.

    0Reply
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