Advice to Landlords Looking for Solid Renters

I live in a giant condo with 218 units. Since living here, I've watched as more of these condos empty due to foreclosure, walkaways, or the landlord is unable to attract new renters.

A few years ago, Sally O' Boyle, a Realtor who now lives in Costa Rica but who keeps her rental management business going via cellphone wrote some of the best advice I ever read right as the Housing Bubble was beginning to burst. She said, and I'm paraphrasing here,

"If you want to sell your home quickly, here's what you do. Drop your price $10,000 a week until your phone starts to ring off the hook."

Exactly.

If way back in 2006-2007 I was trying to unload a $550,000 condo and I had already had it on the market for 90 days with no action, why continue with the same price which brought no browsers?

What I should have been doing is stepping down that price by $10,000 a week until the calls started flooding in. That hypothetical price might have been the $520,000 mark. Or it could have been the $450,000 mark. But somewhere along the line, some shopper of Real Estate would have thought, "Hmmm, this one keeps coming down in price. If it reaches $XXX,XXX I am going to jump on it."

By marking down that hypothetical condo quickly and efficiently (as Sally O'Boyle suggested) I (the hypothetical seller) would not still be sitting on it today, late to the game of reducing my ask price, realizing I could have maybe gotten $350,000 back a few years ago, when today I can't even ask $200,000.

Which leads me to this:

There are units in my building which haven't had an occupant in them the whole time I've lived in my mine. In fact, this condo has more "dark" units today than it did just one year ago.

Case in point is the unit next to mine. It has remained empty for 14 months straight. The owner had it as a second home. He's now being foreclosed upon. For the past 3 months he has tried renting it out for $1,600 a month . . . exactly what my unit used to go for.

However, my landlord is being foreclosed upon. To keep me in here for another month or two, he lowered my rent.

Now I know there are other tenants in this same building who are paying $1,400 a month for the same 2 BR/2 Ba sized condo which I live in. And yet, recently, last week, a similar sized condo which had been advertising for 4 weeks at $1,400 and no renters suddenly dropped its rent to $1,300 and the price change obviously worked as the ad quit running two days later.

Which brings me to the purpose of this post: advice for landlords.

Were I the owner of a money pit which is empty and which I must continue to make mortgage payments, taxes and insurance payments on, would it not behoove me to rent the sucker out as quick as possible?

Hence, what I would do is drop my rent ask by $50.00 a week until the phones started ringing off the hook.

I don't know why landlords sit and HOPE a good renter will come along when renters are all savvy to falling rents all over this island.

Not only that, there is an unadvertised "shadow rental inventory" which is being passed around by longtime hospitality workers and in which (I'm looking at two like this today, Tuesday) the tipster tells you, "the landlord is cool, and you can probably get in without a security deposit," or "he dropped rent on my friend and I think he'd do it again for a good renter such as yourself who'll never miss a payment and is always on time."

There are great landlords out there using this Cocoanut Hotline method of word of mouth advertising. It's an easier way to find great tenants without attracting all the crazymakers who want to waste your time with phone calls asking if they can park their boat in the yard or bring in 3 pitbulls to the pool area.

Were I a landlord, I'd use the Cocoanut Hotline and I'd also consider using Craigslist ads. I would not use the Key West Citizen, because Craigslist allows me to expand the criteria in renters I would be looking for. Craigslist also allows for photos. (Why don't more landlords use photos? The more the better.)

So, I'd write an ad listing all the demands a renter must meet to be considered for my property.

"Hello,

My name is Gary. I own a great little cottage at XXX Catherine Street. It has a tiny, but well kept yard. The cottage is located behind the main house I live in.

I am looking for one good renter/couple with the following qualities:

1. Quiet and who is not into having 4 AM parties with your rowdy
friends sitting around the pool

2. Might have one housecat as a pet (and no more than one cat, and sorry, no dogs, don't even bother asking me to bend this rule)

3. Non-smoker(s). This does not mean non-smokers in the house but who want to come out into the yard around the pool and smoke cigarettes and leave your butts to smell up the hammock. I simply will not rent to anyone who smokes cigarettes in or outside this unit.

4. Pays rent on time

5. Who will notify me immediately when anything in their unit breaks down.

You put this ad up on craigslist at $1,500 rent per month.

If you don't get any leads, drop the rent by $50 to $1,450 the following week.

And if you get no quality leads the second week, drop that ask price $50 again the following week.

Keep doing this 'til you have great renters crawling through your cellphone begging you to take their First/Last/Security deposit and agreeing to abide by all your rules.

It really is that simple.

If the renters break the contract (say they bring home a Rottweiler or take up chain smoking) you show them the lease, give them their 30 days notice, and start running the ad again.

I don't know why more landlords are sitting on properties un-rented for 2, 3, 12, and even 14 months without understanding there are renters out there searching through deal after deal.

Look, the biggest apartment complex on this island, West Isle Clubs, has been advertising "One Month's Rent Free" for over a year now. And they are still not full. Now they've budged on some rents by lowering them $50 a month and advertising "Military Discounts" very heavily in their paper ads. And this is after they've upgraded all units and added stainless steel appliances in the kitchens, new carpet and paint everywhere, and new A/Cs in some of the units. That should tell all landlords on this island the rental game has changed.

And yet the 2 Ba/2 Br unit next to me is still being marketed at $1,600 while a luxury penthouse unit with an ocean view on the next floor up is a 3 Ba/2 Br unit at the exact same price?

Supply and demand, Economics 101

Lower your price, and eventually, you'll have people standing in line willing to trade their dollars for your service. It doesn't mean you can take a dump in a bad location and market it as successfully as a newly renovated place with relative quiet.

Last week I saw a place for $1,400 including all utilities. Great location. Except the damn place needs some serious maintenance and renovation. You can't even open the front door at this time because the deadbolt is rusted into the faceplate. (And the door knob is ready to be yanked out of the door.) That's the first impression you get from this dump. The frozen and unpainted front door. (Actually the sidewalk out front was covered in leaves, trash and detritus, but that's an easy fix if somebody associated with this property would simply grab a broom and try his/her hand at painting and minor repairs.)

This landlord keeps dropping the price while the place is still empty for two months now. Has that landlord any eyes? Have they not tried the door on their own rental? We weren't even issued the instructions on how to enter the place (you need to try and ever so slowly turn the key while lifting on the bent door knob with all your strength, that's all, just a minor overlook there.)

Here's some advice for that landlord: invest in a carpenter. Have him install a shiny brass heavy duty new door knob (preferably a European latch which opens by pressing down with your arm as you hold bags of groceries). Then do something with the rooms. Sheetrock a bedroom with a door so people sleeping aren't woken up by the person outside in the kitchen. I'll gurantee you with just those two changes, you'll have someone rent it out at its new discounted asking price. Hell, I'd rent it out and I'd do all the painting myself if you'd simply do the major repairs needed.

It's just common sense things which landlords are overlooking in this Recession. It's not time to maintain a Fantasy that a "greater fool will eventually come along and rent this place for the price I originally envisioned." Those days are history. Monroe County keeps losing residents and the number one reason why is "It's too expensive to live here."

If you want to rent out your place, it had better have some curb appeal and you need to step down on your price like I just suggested. Eventually, you'll find what the market will bear, and not what the fantasy in your head supposes is the "Price Is Right".



Caveat Emptor,

Rock Trueblood