4 weeks and still no tenants

[cgw]

Any suggestions on what I should do. My 3 bedroom, separate bath/toilet/laundry, single carport, reverse aircond, very secure end unit is still not rented. It is on the net, has been advertised every Wed and Sat, I have dropped the rent fm $210 to $200. It is in good repair, looks nice. But has no built ins, but I put some garment racks, and portable robes in it.
It has has a newer bench tops etc, but it is not a new refurbished place.
Should I drop the rent to $190, which is what it was rented out for last year.
Shall I put built ins in. The rent is at the market rate compared to others.
The PM has had opens once a week, this week no-one showed up. Is it because of Winter.
The PM has been really good, returning my calls etc, so what else can I do. As I am new to IP investing, it is really making me start to think is it really worth this stress.
Pls help.

 

[Xenia]

That's just a reflection of the adelaide market atm. sound's like your pm is doing what they can. I suggest dropping rent down by $10 but don't do anything to the property. SA legislation allows you to increase rent after 6 months even if you have a 12 month fixed term contract. I would suggest dropping rent down, continuing with opens, getting a tenant in then increasing the rent to $200 after 6 months!

ALL THE BEST

 

[cgw]

Thanks Xenia

If anyone was going to give some good advice, I knew it would come from you.

 

[Glucose]

Being in retail, I know that items priced just under the next round number sell better (i.e. $9.95 instead of $10, $99 instead of $100 ) because it SOUNDS cheaper. This is a psychology thing, and is why you always see items priced at $39.95 etc in all retail stores, instead of rounded up to $40 & so on.
So I think it works with property rent too. Asking $300 rent people SEE the 3, but asking $295 their mind SEES the 2 and THAT rent is recognized as being "TWO hundred & something", and hence is perceived as cheaper.
Then, as Xenia suggests, increase the rent by $10 in 6 months, and the perception is more "it's only an increase of $10 a week" rather than "Gosh, the rent is THREE hundred & five dollars a week".
Just subtle difference but it's what the big boffins in retail have studied & understood and practised PROFITABLY for decades.
Set your rent at $195 and I reckon it'll make all the difference!

 

[Peter Parker]

Set your rent at $195 and I reckon it'll make all the difference!

I'd agree with that.

I think it's something to do with tenants (and buyers) selecting their budgets or limits as round figures.

Also Vendors/landlords seem to do the same when setting rents. There are (maybe) 5 times the number of properties at $200pw than there are at $190 or 195pw.

In a market where nearly everything is $200 pw the tenant will have 'anchored' this figure as a budget. So if your place is $190-195 they'll think it's a bargain and apply to move in.

My theory is that it's better to buy a slightly cheaper property where an excellent yield comes from a rent of $195pw (or maybe $295pw) than one where it's $215pw (or $315pw) because of the limits that tenants have.

Peter

 

[HandyAndy888]

yes, the sub-200 is a great psychological invite...

My place was not rented for 8 weeks....bit of a bummer, but my pm just wanted to place a better tenant...and he waited until we got one...

So in essence, all is well now...

I wonder if landlord insurance covers a no rental period....

 

[redwing]

That's just a reflection of the adelaide market atm. sound's like your pm is doing what they can. I suggest dropping rent down by $10 but don't do anything to the property. SA legislation allows you to increase rent after 6 months even if you have a 12 month fixed term contract. I would suggest dropping rent down, continuing with opens, getting a tenant in then increasing the rent to $200 after 6 months!

ALL THE BEST

Whats happening in the Adelaide Market Xenia

 

[softmonkey]

tell me about it, i just had to push an ip through the $300/wk barrier it was not easy! still managed 0-day occupancy, but the applications were sparse. ended up with a tenant a bit out of the square but i think i can work with.

where is this ip cgw, may i ask?

oh, first post btw but have been lurking a while, great forums guys

 

[firstmillion]

Which suburb

The PM has been really good, returning my calls etc, so what else can I do. As I am new to IP investing, it is really making me start to think is it really worth this stress.
Pls help.

Where is it in Adelaide ? I thought adelaide market was pretty tight with rentals.

All the best in your search for tenants !! How are the other properties in your neighbourhood doing ?

Cheers

 

[gerd.]

Hi cgw

Ring the PM tell Him/Her you need help.
In as much as you need to get another PM to be part of the overall team to leas the property.
This will motivate not only the current PM but also the new member of your team

Gerd

 

[kaf]

Sorry this is a bit off topic but I just have to blow my top a bit here. Just spend the last 2 months and nearly 20k sprucing up the outside of our new IP including creating a nice new courtyard and am heading off tonight to spend a week doing up the inside as the tenants are moving out today. Discussed with the RA that we'd put the property back on the market mid next week when it's tidied up inside ready for a viewing weekend after next.

Just went on realestate.com to get a feel for the latest places for rent in the area and find my flat on there, with the "before" pictures for both inside and outside, no indication of the nice seaview plus a wrong letting date... Now how hard can it be to market a place properly??? Rang the agent who said that they just wanted to see if they got hits for it - well not many obviously as they priced it after reno but put the before reno pictures up (and the place did look truely hideous before we did it up...)

After my call they took it off now but what if I hadn't checked? I will now send them all the pictures and write the text too for the ad, glad I'm paying them 8% of my rent!! The only reason I keep them as agents is that they are actually very good managing the place once the tenants are in...

I don't know, Xenia - you wouldn't want to expand to SE QLD, do you?

kaf

 

[GoAnna!]

If winter is such a tough time to rent why would you want a 12 month lease that takes you back into winter???

Kaf, even with my fabulous PM I ALWAYS check my iinternet adverts. No one cares the way you do about our own ip. No-one will immediately notice that they have got something wrong - however small. I also like to keep an eye on how many hits I get over first 24 - 48 hours. Tells me heaps about the market.

 

[kaf]

Kaf, even with my fabulous PM I ALWAYS check my internet adverts. No one cares the way you do about our own ip.

Very true - I'll keep that in mind.

I might have to put an alert out though for realestate.com to tell me when my own properties are marketed before the agreed date ...

kaf

 

[plumtree]

CGW, try adding a refrigerator and advertise that it is included. You might even be able to put the rent up a little to offset the cost. A new refrigerator would appeal to a lot of people and would increase your market. Washing machines are also the sort of appliance that seem to appeal to prospective renters but refrigerators are more upfront and visual.

 

[ralph wiggum]

What suburb is the IP in?

 

[ArJay]

Where is it in Adelaide ? I thought adelaide market was pretty tight with rentals.

Hmm...me too. What gives? All I'm hearing is sob stories....

 

[Xenia]

Whats happening in the Adelaide Market Xenia

Adelaide has been going through a bit of a rise lately. There is a huge competition amongst buyers to compete for the same properties and alot of them are selling at the first open inspection. I think Adelaide is starting to mirror what Perth has done.

Great for those of us who own properties in Adelaide because capital growth is huge, we have been getting our properties valued every 6 months with huge differences it's great.

On the downside though, the influx of new investors coming into the market (especially from Perth) means that there are many rental properties on the market at the same time and this creates competition. The rental market is starting to soften but I believe it will become strong again as prices increase and investors start backing off.

Always a great time to buy and you can only work with the market not against it!

 

[POB]

Check Your Pm

Kaf I had the same problem as you. My IP was on the market for six weeks.
The internet pics were very bad and pixelated. Some you couldnt even see.
My PM I believe had given me a rental amount about $60 a week more simply to get my business.

I too had to drop mine significantlt to get a tennant.

We have one now though.

POB

 

[cgw]

Its in Exeter

Thanks everyone. Its in Exeter, and for those interstaters, this is a beachside suburb next to the new up and coming Port Adelaide development.
It is public transport, local shops, hotels, beach is 1 km away.
I have decided to drop the price back down to $190.00 and then I can up it again in 6 months.
I did notice though that a few of the others have been taking about 3-4 weeks to rent out as well. Oh well, must be Winter.
So much for low vacancies.
But I will take the advice, if it does not go this we, I will be putting in built ins, fridge and washmachine, as all negotiable, and if they want it, they can have it.
Thanks everyone.

 

[Justkate]

Hi...

I agree with everyone else, I'd put it down to $195 p/w or $190 like you're doing. I'd definetly put in built in wardrobes if not a free standing one so they could arrange it in the bedroom as they wish. I don't know about the fridge and washing machine, I'd tend to think not to waste my money on that, only because alot of people have those two already a dishwasher though is something not many people have, but is a luxury any lass would think wow when they saw - well me anyway!

Just my thoughts..

Kate