Thanks for the input.
Well, let's see. . .
The building itself is a class C property. It has decent-sized townhouse units, 650 sq ft 1 BR, 860 2BR. Cosmetically it ain't perfect, and there are things we are doing to improve that, but if you took the five closest buildings on the block we're not the best but I'd say 3rd. There is a nicer building around the corner (#1 of the 5) which is nicer but does not offer any better amenitites, and it is 92% occupied.
Our rents were likely the culprit, although just last spring I was at 100% at higher rents -- about $525 average to today's $450. This did include some bad tenants, though, and we cleaned them out. Lowered rents in October from 499/599 to 425/525, no more traffic. Lowered again in January (my fault for letting it go so long but I was getting deceptively positive reports from manager) to 399/499. Good traffic then but now it's slowed again.
Another competitive disadvantage is they are townhomes and the tenants pay for the electricity. Many of the neighboring buildings are all bills paid. The latest rent decrease should take care of the difference between the all bills building and ours. I also want to get a sample of statements for some of our units to get 12 month figures for prospective tenants who want to know what the electricity costs.
Also, there were drug problems at the building last summer, again the tenants that the prior owner put in the building. Could have left the building with a bad rep; otherwise the neighborhood is a reasonably safe, middle class neighborhood across the street from a 25,000 student university.
Background -- I hired this company in the summer, they placed a very experienced regional in charge of my building who talks an extremely good game about turnarounds and building a community. She seemed to really know what she was doing but it turned out she was basically a pathological liar, not in the stealing sense (I watch that very closely) but in the "say what I have to to make myself look good" sense. So she talked about all the work that was being done and all the marketing she was doing, but when the results weren't there the management company finally fired her in December and I came to realize that a lot of the things she said were being done for marketing were not being done.
Had a come to Jesus talk with the management company and they replaced the supervisor and they know they are on a short leash. It's also their opinion that the Arlington, TX rental market went in the tank in the fall. So I decided to stay with them as they said the right things and were doing the right things in Jan, and we were seeing results, and I wasn't excited about changing managment AGAIN so I gave them another chance.
Next day I talked to a prospective tenant about their interest in a 1 BR, only to find that in my half empty building we didn't have a 1 BR ready for showing.
I am an out of state owner, which adds to the complexity. Another factor may be that the magt company is in Dallas and the property is in Arlington. I have already contacted the management company for the nice building around the corner about possibly taking over my property, which at the moment is starting to like a good idea. What are your thoughts?
Not sure I would do this again, although the fighter in me says learn from these mistakes and get it right next time. But I just can't figure why we've had so little interest these past 6 months.
