Rental Property Advice Sought

[earlyretirement]

I agree with the others (especially EconProf’s post) that you most likely need to lower your price until you get it rented out.

The market has a way of telling you what fair value is. Also, you have to really objectively and subjectively evaluate your property vs. others on the rental market.

Is there anything that is obviously negative on it vs. other properties in the area? Bad decor, ugly bathrooms, dirty, etc? I know some owners that don’t objectively do a comparison on their property vs. what else is on the market.

I compare it to parents and their kids. No parent wants to admit their kid is ugly. And even parents that have ugly kids, probably don’t think they are ugly. Many think they are very beautiful when they are scary (think Seinfelt episode on “stunning baby”). It can be the same with properties.

Also, what is the make up of the property management fee? Do you pay a monthly flat fee to pay the bills? And then a percentage of all rentals? If so, they aren’t really making too much unless they book it.. No? What kind of rates are you paying? How much is the property manager actually making not renting it out?

Also, what competition for property managers is there in the area? I agree sometimes the property manager is to blame but many times it’s just owners that either have properties that are substandard or trying to charge too much relative to the condition of the property. Basis supply and demand issue.

I’m not saying that is the case with yours because I don’t know your case. But it clearly does you NO good to have it sit empty.

Also, how does your property manager go about advertising and getting new clients? Have you talked to other owners that they manage?

A good tip sometimes is to do a bit of detective work and have a friend contact the property manager to set up viewings that they have and set up several including yours and other comparable properties that they manage on the same day and just see how what they say during your visit vs. other property visits. It could be worth the time to do something like that.

[SD Realtor]

My recommendation would be to hit craigslist and other sources for homes as a tenant. Find the ones that appear to match your home, (size/location) and call them up. Ask what the rent is, the terms etc. Make an offer and see what they will actually take. Once you gather this data, reprice your rental to BEAT, not COMPETE. If that doesn’t work for you then sell it.

[paramount]

[quote=EconProf]30 showings and not one application? The market is telling you something here.
If you had lowered the rent after 10 showings, maybe one of the next 20 lookers would have applied.[/quote]

Around Labor Day I went to the prop mgmt company and said: let’s lower the rent, or do some kind of incentive.

They said: let’s hold off, were gonna get this rented.

I did get a call today from the prop mgmt company telling me it is rented. I’ll believe it when tenants are moving in and if it is true, it took much longer than I would have expected.

[paramount]

[quote=earlyretirement]I agree with the others (especially EconProf’s post) that you most likely need to lower your price until you get it rented out.

The market has a way of telling you what fair value is. Also, you have to really objectively and subjectively evaluate your property vs. others on the rental market.

Is there anything that is obviously negative on it vs. other properties in the area? Bad decor, ugly bathrooms, dirty, etc? I know some owners that don’t objectively do a comparison on their property vs. what else is on the market.

I compare it to parents and their kids. No parent wants to admit their kid is ugly. And even parents that have ugly kids, probably don’t think they are ugly. Many think they are very beautiful when they are scary (think Seinfelt episode on “stunning baby”). It can be the same with properties.

Also, what is the make up of the property management fee? Do you pay a monthly flat fee to pay the bills? And then a percentage of all rentals? If so, they aren’t really making too much unless they book it.. No? What kind of rates are you paying? How much is the property manager actually making not renting it out?

Also, what competition for property managers is there in the area? I agree sometimes the property manager is to blame but many times it’s just owners that either have properties that are substandard or trying to charge too much relative to the condition of the property. Basis supply and demand issue.

I’m not saying that is the case with yours because I don’t know your case. But it clearly does you NO good to have it sit empty.

Also, how does your property manager go about advertising and getting new clients? Have you talked to other owners that they manage?

A good tip sometimes is to do a bit of detective work and have a friend contact the property manager to set up viewings that they have and set up several including yours and other comparable properties that they manage on the same day and just see how what they say during your visit vs. other property visits. It could be worth the time to do something like that.[/quote]

I really took an objective look, and I studied the market closely and like has been mentioned I came in at market value.

I had others go through the house and tell me honestly what they thought. They all said the same thing – the house is immaculate. Newer kitchen, new carpet, paint, outlets, switches, toilets…the list goes on and on.

Very good location, quiet street – all the right ingredients.

Prop Mgmt fees are $395 for tenant placement, then about $110 per month including eviction insurance.

I interviewed over 10 prop mgmt companies before deciding on the one I chose.

[scaredyclassic]

Price sounds about right. Know a guy paying 2200 for not a great place, moved into one for 1700 bit bigger than yours. He’d been way overpaying for quite a while.

[paramount]

That’s what the prop mgmt kept telling me – the price is fine.

[(former)FormerSanDiegan]

[quote=paramount]That’s what the prop mgmt kept telling me – the price is fine.[/quote]

Maybe. But if you had dropped the rent three weeks ago and had a tenant move in 2-4 weeks before the ones that might ber moving in over the next few weeks, then you would have generated more cash over the year.

[earlyretirement]

[quote=paramount][quote=earlyretirement]I agree with the others (especially EconProf’s post) that you most likely need to lower your price until you get it rented out.

The market has a way of telling you what fair value is. Also, you have to really objectively and subjectively evaluate your property vs. others on the rental market.

Is there anything that is obviously negative on it vs. other properties in the area? Bad decor, ugly bathrooms, dirty, etc? I know some owners that don’t objectively do a comparison on their property vs. what else is on the market.

I compare it to parents and their kids. No parent wants to admit their kid is ugly. And even parents that have ugly kids, probably don’t think they are ugly. Many think they are very beautiful when they are scary (think Seinfelt episode on “stunning baby”). It can be the same with properties.

Also, what is the make up of the property management fee? Do you pay a monthly flat fee to pay the bills? And then a percentage of all rentals? If so, they aren’t really making too much unless they book it.. No? What kind of rates are you paying? How much is the property manager actually making not renting it out?

Also, what competition for property managers is there in the area? I agree sometimes the property manager is to blame but many times it’s just owners that either have properties that are substandard or trying to charge too much relative to the condition of the property. Basis supply and demand issue.

I’m not saying that is the case with yours because I don’t know your case. But it clearly does you NO good to have it sit empty.

Also, how does your property manager go about advertising and getting new clients? Have you talked to other owners that they manage?

A good tip sometimes is to do a bit of detective work and have a friend contact the property manager to set up viewings that they have and set up several including yours and other comparable properties that they manage on the same day and just see how what they say during your visit vs. other property visits. It could be worth the time to do something like that.[/quote]

I really took an objective look, and I studied the market closely and like has been mentioned I came in at market value.

I had others go through the house and tell me honestly what they thought. They all said the same thing – the house is immaculate. Newer kitchen, new carpet, paint, outlets, switches, toilets…the list goes on and on.

Very good location, quiet street – all the right ingredients.

Prop Mgmt fees are $395 for tenant placement, then about $110 per month including eviction insurance.

I interviewed over 10 prop mgmt companies before deciding on the one I chose.[/quote]

Sounds like you definitely did things the right way and have a nice property and it just came down to price. Congrats on getting it rented now. 🙂

[Author]

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