System - Monday, December 3, 2018
When discussing a target rental rate with landlords, I typically describe the need to balance between the competing goals of maximizing their cash flow and minimizing their vacancy. Setting a higher listing price will hopefully result in a more positive cash flow, while setting a lower listing price will more likely result in more interest from prospective tenants, a quicker move-in date, and a decreased likelihood of extended vacancy.
Personally, when setting a listing price for my own rental properties, I lean toward the lower range of the suggested listing price because I have a complete aversion to vacancy! Vacancy not only equals lack of cash flow, but also introduces many risks.
First, a landlord’s insurance policy may require additional coverage for properties that are vacant for more than 30 days. Landlords should always check with their insurance provider to understand their policy’s requirements regarding coverage during vacancies.
Vacant properties can become a “hang out” for teens to congregate around or break into. We’ve had several instances of teens breaking into vacant properties during the winter months to find a warm place to smoke. In some areas of our county, homeless persons have also take...
Michele - Sunday, July 22, 2018
As a property management company, we offer two separate services:
- Tenant Procurement (referred to as Listing the Property) and
- Management of the property once a tenant is in place.
Most landlords take advantage of both of the services that we offer.
Sometimes, a landlord may already have a perspective tenant identified from their social network or may wish to minimize their tenant procurement costs by finding a tenant using their own online resources. We are happy to work with a landlord in these scenarios as long as the landlord is still in the property and can coordinate showings, answer perspective tenant questions, and negotiate terms of the lease.
If the landlord decides not to procure their own tenant, we welcome the opportunity to list the property. This entails providing a market analysis, determining a list price, photographing the property, installing a sign and lockbox, coordinating showings, providing weekly updates, processing applications, and negotiating the lease. This service requires a licensed Realtor who is compensated through the listing fee based on a percentage of the rental rate. In our business, we do not get paid until we succeed, ...
Michele - Thursday, February 23, 2017
Last week, a homeowner who is getting ready to move across the country for a job transfer contacted us to request that we procure a tenant and begin managing his property. Our associate broker prepared a rental market analysis and suggested that we start marketing the property at $1995 based on recently rented and currently active homes in the neighborhood of similar size, age, and condition. The highest price that any property had ever rented for in that neighborhood was $1995. There were several properties actively available for $1900-$1995. While the average rented price for homes in that neighborhood was closer to $1900, this property was an end unit in excellent condition. The broker felt that this property compared closely to the homes that had rented for $1995.
Despite our recommendations, the homeowner asked that we start with an initial marketing price of $2180 since the total monthly cost of his mortgage, HOA fees, and property management fees would be $2180. He also indicated that he’d like to have a tenant in place within 3 weeks.
We took the time to educate this homeowner on how important it is to start marketing at an appropriately competitive price point. Nearly all s...
Michele - Wednesday, February 17, 2016
When processing an application for a new tenant, we review credit and criminal history. We also verify income, employment, and rental or mortgage history. Unfortunately, we cannot vet an applicant on their house keeping skills.
However, we do have one possible way to glimpse into the how well an applicant may keep a home. When an applicant is well organized in their financial business, paying all bills on-time and not over extending their credit, it is likely that their organizational habits may extend to their home life as well. My mother in-law has an 830 credit score and her home is immaculate 365 days per year, so she is my point of reference, but over the past 5+ years, I’ve also seen a trend with our tenants. When tenants are working multiple jobs and scrambling to pay rent, they often don’t have the time, energy, or ability to maintain their rental property in a way that the owners wish or expect. Typically this doesn’t mean that there will be any damage to the home. But it does mean that the home may not show well when it is time to sell or re-rent.
So…. Just something that I’d suggest new landlords consider …… for homes where above ave...
Michele - Tuesday, December 29, 2015
Having listed 140+ properties this year and hundreds more over the past several years, we are constantly looking for ways to measure and improve our listing performance. One statistic that we discovered early-on is that the optimal time to begin listing a property is 45 days before the availability date. Most tenants are looking for a property 30-45 days in advance of their target move-in date. For example, if a property is available for a tenant to move in on May 1st, we suggest putting the property on the market on March 15th. When we list a property 45 days in advance of the availability date, the majority of the time, we move tenants into the property on the target date.
Another important factor to ensuring that we have a tenant move in as close as possible to the availability date is pricing the property competitively when first going onto the market. Listed properties have the most visibility at the time they are first listed since many perspective renters have set up search criteria and are notified when a new property comes on the market that meets their criteria. Pricing even slightly above the range that is being searched for in the area means the property will not show up in many searches.