All Forum Posts by: Maranda Tucker

The Hidden Cost of Overpricing Your Rental

One of the biggest mistakes I see landlords make in Charlotte? Overpricing their rental. With rising costs like HOA fees, insurance, and property taxes, it's tempting to push rents higher—but that strategy often backfires (and IS backfiring), especially in today's market.

Why Overpricing Hurts More Than It Helps

• Rents have softened, and supply is increasing. Tenants have more options, and overpriced properties are sitting vacant longer.
• Longer vacancies = lost rent.
• Less tenant interest = fewer qualified applicants.
• Price reductions = you likely end up earning less anyway.

A Real Life Example

An investor recently listed a townhome at $2,200/month instead of the market rate of $2,000/month. After six weeks of vacancy, they finally adjusted the price—but by then, they had lost over a month’s rent. Meanwhile, a similar home priced at $2,000 leased in two weeks with no losses.

Moral of the story: Price it right from the START. We are not in a position to "test the market" right now.

Hey Gabrial! 

Charlotte, NC professional property manager here! I just sent a connection request. I LOVE Charlotte - great for investing - but I, of course, am biased. 

Excited to connect. 

Your question is a little unclear. If you are looking on how to find a property manager for your property - definitely ask for referrals! Because you are out of state, these questions may be important for you to ask the property manager you are interviewing:

1. Do you conduct inspections while the property is occupied? If so, do you take photos and/or report back to me whenever inspection has been conducted?

2. Maintenance: How do you handle repairs? More specifically, do you upcharge on invoices? Is there a maintenance threshold (also called a not-to-exceed limit)? Do you have inhouse maintenance or a trusted vendors list? 

3. What does the process of getting the property "rent ready" after move out look like? 

There are a lot of other questions you will want to ask - but these 3 specifically address your fears around not having eyes on the property and what that would mean for you as an out of state client. Whoever you go with should have very clear and outlined processes for each of these questions.

I hope that helps!

Quote from @Bharath K Raju:

Thank you all for your detailed response. It is good to hear different perspectives. I enquired about the HELOC on the rental property and I am not getting good terms that work out. We are a family of 4 and options like co-living is not viable. Also, we are considering returning to India in 3 years to be with our aging parents. With limited time I have in US, I have some financial targets to meet, one being scale and increase my net worth. With that said, I am not going to make any decision in haste. I am talking to my financial advisor, who is an expert in this space to gauge pros and cons. I will keep you all updated on the decision and the progress we make. I might reach out to some of you for help. Thanks again!

 Is your financial advisor local? If so, do you mind sharing info?

Quote from @Jorge Caceres:

Zillow is good platform for taking applications and for posting your listing. Applicants pay a one-time application fee, which is valid for 30 days, allowing them to apply to multiple properties within that period using the same fee. As a landlord, Zillow provides you with a background check, credit score, and a well-formatted application for each applicant. Your property is also listed in multiple sites owned by Zillow, and is free! Depending on your property's location, setting a minimum FICO score is advisable. A FICO score requirement of 650 or higher, along with at least three years of consistent income that's 3X the monthly rent, are also a good ideas. These are just guidelines and may need to be adjusted based on your property's location and class. While these criteria work well for Class A and B properties, they might not be suitable for Class C. Personally, I believe it's preferable to have stricter requirements and wait for a qualified tenant. The payoff is worth it in the long run with reliable, on-time rent payments and tenants who are more likely to stay long-term, and take care of your property.

 I want to throw caution to the zillow applications. In our market (Charlotte,NC), the RE Attorney we work with mentioned that the majority of the evictions he saw in 2024 were from zillow applications!

Hi Bharath!

Your situation presents a classic trade-off between long-term appreciation potential and short-term debt reduction. Here are my thoughts:

First, your 2.6% mortgage on the rental is an absolute goldmine—it’s a rate we’re unlikely to see again in our investing lifetimes. Selling means giving up an incredibly cheap cost of capital, especially in an appreciating area like 28277.

I direct my investors to 28277 all the time for appreciation-focused plays. Ballantyne and South Charlotte are experiencing continuous growth, and the demand fundamentals remain strong. If appreciation is part of your long-term wealth-building strategy, holding onto this asset could be wise.

That said, if your main goal is to aggressively pay down your primary residence mortgage, selling could make sense. Paying off a chunk of that 7.3% mortgage is essentially a guaranteed return at that interest rate. However, this also means walking away from future appreciation gains and potential rent increases.

As for a HELOC on an investment property, yes, it's possible, but terms are typically less favorable than primary residence HELOCs. Expect lower LTV limits (often 70-75%) and higher interest rates. But if you can secure one with solid terms, it could be a great way to access capital while keeping the rental.

If you believe in 28277's continued appreciation (and I do), I'd lean towards holding the rental, increasing rents through strategic upgrades, and leveraging equity via a HELOC or cash-out refinance if the terms make sense. This allows you to benefit from appreciation, continue building equity, and still access capital for new deals without sacrificing an ultra-low fixed-rate loan.

Would love to hear what direction you’re leaning—lots of ways to approach this depending on your risk tolerance and goals!

Quote from @Sean Regan:

Appreciate the tips. Very helpful! I need to install LVP throughout, replace bathroom vanity, toilet, and fixtures, install a new dishwasher, and finish a 300 sqft ADU with drywall, paint, and LVP that can be used as an office, rec room, etc. I figured I at least need to get these completed before photos and listing. I also plan to touch-up paint, fix kitchen cabinet drawers, replace outlets and a few door handles. It seems like I would be cutting it close to try to finish, list, and lease it starting March 1?

 Sounds like you still have a ways to go! I think a March 1 lease might be a little out of reach.. Unless you can knock all of those items out in the next week, price competitively in the market and are in a hot area. 

If you need rental comps for your area, let me know! I can shoot them your way. Also happy to share market updates. :) 

Good luck!!

Quote from @Nathan Gesner:

Quote from @Maranda Tucker:

Most county records aren't public. Even if they have a public record in your county, they may have issues in another county that are not disclosed. Fortunately, people with criminal records typically have other issues like bad credit or landlord references.

True. The main lesson for us was that there is still a level of due diligence that our team must perform regardless of screening software. We were just really lucky to not have any major issues pop up until last year. 

Quote from @Jill F.:

@Nathan Gesner I know! This morning I evicted an inherited tenant in a building that I"ve now owned for just over a year.  I did public record searches on all the tenants while I was in the process of buying the building just so I'd know who I was going to be dealing with. The guy I bought the building from rented to said tenant WHILE HE WAS IN THE PROCESS of being evicted from another property.The tenant was a borderline hoarder that quit paying rent in December and then left the place a mess. The landlord across the street rented to him AFTER I was granted a writ by the court and just two days before his move out date with my eviction easily viewable in court records???!!!! It's baffling. It's probably not going to end well for that landlord.

We actually had this happen to us twice last year (at the same time, in 2 different units)! We relied too heavily on AppFolio's screening process, which doesn't update with our county's records fast enough. 

Learned that lesson the hard way. Never again.

Quote from @Vince Scipione:

Exposure is great, but quality of tenants far outweighs quantity. Realtors typically pre-screen rental clients to make sure their time is not going to be wasted. Usually prospective tenants that agents bring to showings will be more qualified to rent in my experience. I think eventually a VR set up will be common online or at RE offices. Where buyers/tenants can view dozens of properties in a day to screen out less desirables then schedule with a real agent to see the home in person! Would be an interesting change!

This was the assumption we operated under until December 2023. In just the past week, I've had to deny six applications from agent-led showings because the agents didn’t conduct proper due diligence upfront. It's hard to say how many properties those agents showed to those prospective tenants without any return—what a waste of time!

Currently, agents aren’t significantly rewarded for showing rental properties to potential tenants. The highest fee I've seen for assisting with tenant placement is 10% of one month's rent. With average rents in Charlotte hovering around $1,800 to $2,000, that means an average agent fee of just $190—if the management company even pays the showing fee.

I understand that this may vary by market, but in mine, I don’t see agents being incentivized to work with renters. Nonetheless, I am committed to ensuring that agents are compensated for their efforts in showing and placing tenants in our properties.