Author Topic: longest vacancy?  (Read 4449 times)

js625

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longest vacancy?
« on: September 16, 2014, 06:54:06 AM »
just wondering from personal experiences what everyone's longest vacancies have been when looking for new tenants?  At what point did you decide to lower the price, or change strategy?


Scooter

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Re: longest vacancy?
« Reply #1 on: September 16, 2014, 08:58:57 AM »
Two months. We evicted the previous tenant on December 26th. Ever since then, I have been very sensitive to the time of year that I will start to look for a new tenant. In that situation I did not consider changing the price as it was in keeping with the location, size and condition of the property. I just chalked it up to few people looking to move around the Christmas holiday season.

Fishingmn

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Re: longest vacancy?
« Reply #2 on: September 17, 2014, 12:15:36 PM »
About 1/2 - 2/3 of my tenants seem to be renewing lately.

When I do have turnover my goal is to have zero vacancy. I start marketing the property about 45 days out and reduce the price every 5-7 days if needed. Much less expensive to reduce the rent than have a vacant month. Longest I've ever gone with a vacancy is 1 month. I would expect that this calendar year that across my 11 properties I will have 15 total days vacant at 1 of them even though I budget for 3%.

arebelspy

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Re: longest vacancy?
« Reply #3 on: September 17, 2014, 12:58:39 PM »
I start marketing the property about 45 days out and reduce the price every 5-7 days if needed. Much less expensive to reduce the rent than have a vacant month.

What are your average rents and how much do you decrease by?
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usmarine1975

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Re: longest vacancy?
« Reply #4 on: September 17, 2014, 01:19:23 PM »
Our usual turnover vacancy is 1 month.  We have 1 unit that for some reason tends to take longer.  It's a little older has no tub (shower only) and could use a kitchen update may be some of the reason.  But the timing of that unit emptying out has also played a roll.  Once the Holidays hit it can be harder to get good quality tenants.  We are a bit fussy on who we allow in our units.  We have decided losing a month is cheaper then having to evict, repair, and try to collect back rent.  Generally we don't like to rent to a tenant that can move in immediately unless the circumstances make sense.  If they are coming from another landlord we would expect they give a 30 day notice at minimum as that is what we want.  We turn away the I will move in tomorrow tenants and we do not forego the background check or the deposit's.  I don't give loans to new tenants via the deposit.

All of our Rents are on the higher end or roughly $1,000/month with utilities included.  Cheaper units do exist but the value we add with providing the utilities helps us get better quality tenants and for the most part Long Term Tenants.  Our Longest Tenant at this point has been with us for 8 years with the 2nd longest being around 6 years.  We have had very few 1 year tenants.  The last one we did have had a problem with the neighbor and was moving out of the area or so we were told.
« Last Edit: September 17, 2014, 02:40:37 PM by usmarine1975 »

johnhenry

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Re: longest vacancy?
« Reply #5 on: September 17, 2014, 02:06:48 PM »
About 1/2 - 2/3 of my tenants seem to be renewing lately.

When I do have turnover my goal is to have zero vacancy. I start marketing the property about 45 days out and reduce the price every 5-7 days if needed. Much less expensive to reduce the rent than have a vacant month. Longest I've ever gone with a vacancy is 1 month. I would expect that this calendar year that across my 11 properties I will have 15 total days vacant at 1 of them even though I budget for 3%.

This is similar to what I do.  I also budget for about 3% vacancy and have never had a year where I've (even close) reached that budget across all properties.  And rarely even go over that percentage on even one property during turnover years.

I put up ads and start processing applications as soon as I know the place will be vacant, which is usually only 30 days out.  I do also set the rent optimistically and then bring it down if there is little interest.  14 days is the longest vacancy I've endured and that was with a massive cleanup effort after a tenant trashed the place.

On the other hand I have a place rented now for $575 that (I think could be) renting for $625 or more.  Over an 10 day period, I started out asking $625, reduced to 600, then to 575.  Looking back, I probably should have kept it at $600 for a while longer, maybe even $625.  Yes, the loss of income and footing the utility bills can be costly during vacancy.  But it's hard not to think about the $50/mo left on the table.  I still tend to lean towards lowering the rent to lease it a little quicker.  I don't like raising rents on good tenants, but in cases like this, I usually will make a small adjustment after the second year.

js625

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Re: longest vacancy?
« Reply #6 on: September 19, 2014, 06:31:08 AM »
thanks for the replies.  The reason I ask is we have a new property on the market that we're asking $1000/mo.  We had two separate people say they wanted the apt, and then put a deposit down to take it off the market.  After we ran credit/background they both backed out (even though these came up fine).

So we're at about 5-6 weeks vacant now.  I'm debating whether or not to drop the price because we have people interested, I think we just ran into some bad luck.  The price is in line with other rentals in the area.  I own the property outright so my only carrying costs right now are about $100/mo taxes and very minimal utilities.

usmarine1975

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Re: longest vacancy?
« Reply #7 on: September 19, 2014, 06:39:28 AM »
Just asking.  Do you charge an application fee, did each get their full deposit back.  I have had the same thing happen seems odd to me, but it has happened.  We charge an application fee to cover our cost.  And in comparison to when we didn't charge it we get less applications but usually more serious applications.  In my area the Rental market has been flooded and it seems as though options for tenants are bountiful.  We hesitate to lower our price but at the same time consider it especially in regards to not having a long vacancy.  If you know a Realtor that handles rentals give them a call and just see what their experience has been.  I have done this on occasion and sometimes I learn something that I didn't or would not have thought of.  We include utilities in ours so we have to be certain prospects know the utilities are included.

I should note that for us we haven't had any one back out after a Deposit.  I have had applicants back out after we have offered it to them.  I don't take it off the Market until the keys are handed over and Tenant moves in.
« Last Edit: September 19, 2014, 08:07:50 AM by usmarine1975 »

arebelspy

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Re: longest vacancy?
« Reply #8 on: September 19, 2014, 07:39:31 AM »
I don't know about you, but our deposit to hold says it's refunded if we decide not to rent to them, but if they back out, it's non refundable (in giant capital letters, which they initial next to and also sign at the bottom), and it's a hefty chunk.  I don't hold a property and take it off the market unless I'm being well compensated for it.  Otherwise if they don't want to put a deposit down, I keep showing it for rent.
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mooreprop

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Re: longest vacancy?
« Reply #9 on: September 19, 2014, 12:30:39 PM »
Me too, ARS.  Bird in hand is worth 2 in the tree (as my Dad says).  Unless I have nonrefundable money in hand, the property is still for rent. 

Longest vacancy for me was 3 months.  I bought a house with a partner who thought the house was rented for too little.  I marketed it at the price that he thought it was worth.  He is a realtor, so I thought maybe he knew more than I did.  Turns out that I know more about fair market rents in the area than he does.  After 2 months, I told him that I would be lowering the rent by 25% to the amount I first told him it was worth.  If something is not renting, it is either the price or the time of year.  If it is the time of year, I do not lower the price.  Most people do not want to move the week of Christmas regardless of whether you lower the rent.

Fishingmn

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Re: longest vacancy?
« Reply #10 on: September 19, 2014, 02:03:00 PM »
I start marketing the property about 45 days out and reduce the price every 5-7 days if needed. Much less expensive to reduce the rent than have a vacant month.

What are your average rents and how much do you decrease by?

Average place I have is 2br/2ba/1car townhouse. Rents are in the $1000-1100 range. Usually reduce around $15 each time.

arebelspy

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Re: longest vacancy?
« Reply #11 on: September 19, 2014, 02:43:10 PM »
I start marketing the property about 45 days out and reduce the price every 5-7 days if needed. Much less expensive to reduce the rent than have a vacant month.

What are your average rents and how much do you decrease by?

Average place I have is 2br/2ba/1car townhouse. Rents are in the $1000-1100 range. Usually reduce around $15 each time.

Thanks!  :D
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clarkfan1979

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Re: longest vacancy?
« Reply #12 on: September 20, 2014, 06:47:19 AM »
I have one rental and my vacancy rate has been 0% for the last 7 years. It is a college rental. If I was too high, I would know ahead of time because students typically sign a lease 3-6 months before they occupy. I advertise in April and have the lease signed by May 1st to be occupied starting August 1st. My timeline is a little late. Many students have their housing secured by mid-March.