Advice for renting out a home in the Winter market?

Question

Hi Midwest BP,

I will be closing on a SFH in Edina, MN on December 22nd. My goal is to get it rented out with a short or long term lease by at latest February 1. My thought is that if there isn't a great long-term tenant pool, maybe a short-term or Airbnb strategy could get the home into a spring/summer rental cycle. AirBNB also probably not great in winter months. I have permission from the seller to advertise the home, but haven't done a ton of advertising other than Facebook Marketplace, with not many results yet. Any advice on what you might do in this situation? Thanks!

Nick Anderson · Answer

@Doug Spence @Joe Splitrock @James Hamling @Matt J. Thanks for all of the input. We closed December 22nd, signed lease with Class A tenant same day starting January 1st. Little to no marketing needed, really hot rental market with few options in the school district.

Joe Splitrock · Answer

I grew up in the Twin Cities and I know the market / climate very well. I am in a similar market temperature wise and basically November through January are very slow rental months. We generally discount during those months. However, this year rents are higher today than they were in the summer. This has been an exceptional year for my market as people have been relocating to my market. I rented to two families this year that actually left Minnesota!

I don't think doing temporary short term rental is a great strategy. January is not a desirable month to visit Minnesota and the startup cost/time of a short term rental doesn't make sense as a short term play. I would discount rents lower than the competition as a way to attract tenants. Offer the initial lease as either 6 month or 14 month. That places your renewal during warmer months when you can charge higher rents.

People move all times of the year. I have rented units in December and January, but as I mentioned it is usually for lower rent than I could get in May or June (peak time).

Mike Juliff · Answer

@Nick Anderson

Nice Nick! Glad it worked out for you. Finding renters can be nerve wracking during winter months but it sounds like you handled it well. I market almost exclusively on FB marketplace and have had great results. Zillow and Apartments.com are also good. Tenant placement and management just take effort. They aren’t that difficult if you know how to handle people. Some might think you need to hire people to help you but I believe anyone can learn the business if they try. Best of luck with your new property!

Joe Splitrock · Answer

That is wonderful. I have had it work out that way many times. Just be aware it may not always be like that. Not trying to be negative, but I don't want you to worry if it takes longer next time. This is the best rental market I have ever seen in my 17 years in this business.

Matt J. · Answer

Edina doesn't allow Air BnB's anyway https://www.edinamn.gov/Faq.as...

Either way, you'd be better off going long-term because like you and others have said, it's not easy to get a short term rental leased in February in MN.

James Hamling · Answer

@Nick Anderson This is an great example of where the saying "Hire your weakness's" is specifically meant for. Your clearly out of your depth and experience for how to best lease a unit, at minimum for completing the entire marketing for tenant placement and with that I think it's safe to assume the lease portion and the later property management as well. You gotta hire a great expert at this, and than ask many questions, observe closely, learn it all from the safe side-seat.

@Joe Splitrock is correct, for the historical averages, although we are not in a normalized market by any stretch right now.

You should be able to lease that place out in less than 30 days, and using some good tactics could be under 20. That is bananas for this time of year but my team is doing it right now, in volume. Not only is there massive unit shortage in the rental space, but there is price impacts forcing tenant movement, and that means higher than average activity.

I can tell you FB Marketplace is NOT "the" place to find tenants, yes it is "a" place to find them but not "the". To give a glimpse behind the curtain, when my team markets a property for lease, we syndicate it out on dozens upon dozens of sites, we measure our weekly traffic in millions, literally. And that may sound like a lot but the conversion rates are in the single digits, so you must have a massive net reaching tons of people, repetitively, and have a great lead flow system, that's how you lease a property to a decent tenant quality, at a good price, in short time. (for those not in the know on the analytics, millions weekly is not millions of individual persons, it could be 100k people visiting 10,20,30+ times, and most often any connected person has gone thru re-targeting multiple times)

There are some veterans out there who do well with less, although that's the point, veterans, they have developed skills and local market knowledge on how to do it in a niche manner.

Do yourself a huge help, hire a local expert to get things done right, and learn and develop from their example.

Doug Spence · Answer

@Nick Anderson Have you looked at Airbnb/Vrbo in the area the property is located? That will give you an idea of the availability, pricing, and amenities for comparable properties. You could also send a message to owners of potential competitors and ask them questions about occupancy rates in the winter months.

Good luck and keep us updated on your progress!

Advice for renting out a home in the Winter market?

Advice for renting out a home in the Winter market?

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