Start By Investing in a Good Area.
I know that headline is really something you’ve never heard before…(yes my tongue is in my cheek).
Let’s assume here that your rental property is in a decent enough area that you haven’t had to take your Pit Bull dog and a side arm with you to collect the rent ok…?
Ok Now What…? Your Property is Vacant…!
Part of the problem in today’s market with turn over in rental units is that many good tenants are moving up to Home Ownership after several years as a Renter.
Those renters are also in competition for the Re-sale Inventory with Investors that have a lot of cash and equity that is looking for a more stable and secure equity position. We also have low interest rates for those investors and first time buyers that are able to qualify for a loan. I bet you didn’t know that many of the transactions today are “all cash” with no financing involved at all.
I’m giving you this background to show you that there is competition among many Landlords for the same prospective tenants.
Here’s a good exmaple of what I am talking about. Our Management Company recently leased up two homes in Folsom, one in the Broadstone area and one in Empire Ranch. Both of these homes started out at $2,350. They pretty much had the same amenties, such as Granite Counter Tops, 3 car garages and were well landscaped. The Broadstone home was a 5 bedroom while the Empire Ranch home was a 4 Bedroom.
During the course of showing these homes, we were amazed at the number of prospective tenants who wanted us to negotiate a “reduction” in the rental rate we advertized. Only those propects that were interested in these houses asked us. All the others…..? just thanked us for our time, but told us “they were still looking”.
At first we resisted lowering the rent but as the weeks went on, I realized that the market had changed and become more competative.
And So…? Yes…. we did in fact lower those rents and both homes now have well qualified tenants.
Don’t forget that during this time period, when our staff met each week to go over our “available rentals” that we had on the board, we’d also discuss phone traffic, comments made at showings, email inquiries and “pending applications”, if any.
We decided to get ahead of the market and to offer specials, such as 1/2 off the 1st months rent, some “move in date” flexibilty and an across the board reduction on our asking rents. This is also a slower time of the year with folks moving and we do have some “unemployment” that is causing rents to be a little flat today.
In addition we’ve kept track of the competition in our service areas so we know what is a reasonable rent for each product we have to offer.
To get an idea of what prevailing rents are, take a survey of the immediate area surrounding your property, contact a property management or two to get their input and do some “web research” Check out this little information site that I think is useful: http://www.rentometer.com/
I don’t want to beat a dead horse here, but please remember that “curb appeal” and “condition” will now play an even bigger part of not only getting top dollar rents, but in the amount of inquiries you receive to get you that great tenant. Tenants can be picky in a “Renters Market”.
Make it a great day….!