Best time to show rental property for an open house...marketing rental advice sought, too... - Posted by HR

Posted by HR on July 26, 2000 at 07:27:41:

nt

Best time to show rental property for an open house…marketing rental advice sought, too… - Posted by HR

Posted by HR on July 23, 2000 at 18:03:47:

Hey folks,

I advertised a duplex the last week, and I’m disappointed with the results. If you will, allow me to descibe my marketing approach, and then, (please) bombs away on how to improve. (I’d appreciate experienced replys, not an idea that sounds good. I’m real good at sounds good. I need the voices of experience here)…

It’s one half of a duplex. 900sf, 2 bedroom, 1 bath. Standard for the area. Advertised for $600/month, with off-street parking (very desirable). Ran an ad in the classified paper for a week, and the phone number directed the callers to a 2 minute message that described the property, features, etc. Told the caller about an Open House on Saturday and Sunday from 10-11:30 am. Told them not to leave name or number, but come to open house. None did. Also, pets were welcome.

The fmrent for the place is around $550. With pets, though, $600 isn’t a reach. New appliances, etc. Nice. Good curb appeal.

I got very few folks to come take a look at the Open House, and no one to put in an application. Bummer! I’m wondering:

  1. Did I use a bad open house time? I think so. Probably 1-3 would have been better? Any experienced advice here?

  2. I hate answering 50 stupid calls with 100 stupid questions about the rental property, and I don’t make special trips for showings. I like this Open house idea, a la Jeffery Taylor, but could I be hindering myself by not being available by phone? Ok, I know I’m hampering myself, but frankly, I don’t care as long as I get a good tenant. Answering the phone and returning calls (with the same stupid questions) is absolutely the thing I hate most about the rental game. Waste of time. I like the open house for efficiency sake, but, if no one good comes, what good is it doing me?

  3. I’m about to refinance this property. It’s a middle class rental, and this poor response doesnt make my heart sing. Presently, I am loving my low-income inner city stuff…and I’d rather go in that direction than this middle class stuff. I’m probably going to list it “rent to own,” and see what I pull and look to do a 1-2 year lease option (yearly renewable) with high sales price. I believe that will attract better numbers. Fmv is around 105k, my refi loan will be 65k, and in a year I can get an appraisal for 110-115.

  4. I made a major error here in my judgement. This is a nice house in a quickly appreciating area. The area, though, is still a mix of first time homebuyers and low income rentals. Folks love the house and renovation. It’s the neighborhood, I know, that is turning some away. Even thought the hood is getting better, I thought I could attract some middle class folk to the place as renters. Especially the college crowd. major mistake. I now acknowledge that what you see in the neighborhood is what you are going to get as rental applicants. The “rehab it and they will come” strategy is folly, and too risky. Not for me no more. (So let’s dump this puppy and find some more houses for 10K or less with major positive cash flow!..)

  5. there are those “lines” in rent rates and home prices, and I have one going on here. I can rent this for $550, probably pretty easily. Ok, maybe with some work. but I could probably get 550. 550, though, drops me down into a different rental group and home expectation. It’s hard to describe if you don’t know what i mean, but one of the demarcation lines in my city is that rent rate. I thought I could get 600 and 600 tenants, (and the house in a different area would easily go for 750) but this neighborhood aint ready for that yet.

  6. Finally, my marketing mix was classified ad, flyers posted on local telephone poles (all torn down both weekends within 24 hours…waste of time and $$$), flyers in coffee shops etc, yahoo internet advertising for free, voicemail, sign and property features on house and front window…I feel good about the attempt, but it didnt’ work.

I don’t want another weekend like this. One of those weekends where much that could go wrong on a bunch of deals did. In fact, while we are at it, let’s start this discussion, too.

My other rental kicks a ss in comparison to this. Its a fire damaged reo I bought for 2k, fixed for 18k, I’ve got a section 8 tenant in with HUD paying me $788/month (tenants portion equals only $24/month for 1800sf, 6 bedroom house…jeepers…), its worth 55k all day long, will comp at 65k, and Im going to finance at 25k and have major positive cash flow. Also, this tenant was at her last voucher extension and was about to be placed into another project (something she desperately didn’t want). Her live in boyfriend is a maintenance man for hud (they obviously don’t know about him, but she was up front with me about him; a good move) and he’s been fixing any small stuff wrong with the apt for free. I told him and her that I chose her because of his skills, and, if they keep it clean and relatively unbroken, she can stay for the next 30 years (assuming shes a good tenant…paying on time will obviously not be much of a problem. lol). Anyway, I may come to regret section 8, but I love this little money tree. While some folks also have a real problem with low-income minority tenants, I don’t. I don’t know. I could go on and on here. But I can continue to pick up this stuff for less than 10k, rehab for less than 30k total, finance, and still have a nice little positive cash flow. The other nice thing about these tenants is they are less picky, and they often have handymen skills (which many middle class folks don’t).

Ok. Enuf. I won’t go on and on. I need advice on my marketing strategy. It s ucked and didn’t work. This conversation about low-income inner city cash cows is a side conversation. Any opinions about pros and cons of any of this is welcome, especially if it is from an experienced voice.

Cheers,

HR

Hal… - Posted by Vic

Posted by Vic on July 25, 2000 at 01:57:17:

Hi Hal,

Sorry to hear about your troubles with this house.

A couple of things:

  1. 10:30 A.M. is much, much too early to hold an open house in this city, especially on a weekend. As some have mentioned below I wouldn’t hold an open house at all. You know when I first started selling houses, sometimes I’d hold open houses on Sunday’s. It didn’t take me long to come to the conclusion that they were a total waste of time. The avg. turn out was maybe 3-4 per 2 hr. open house. Sometimes, you’d get nobody showing up.

  2. Many of the responses below are very good. It seems that everyone has their own system that took them time to develop. So, for you this is just part of learning what works & what don’t (or at least what don’t - LOL). One suggestion I have that might solve your problem, at least a little, is to continue using your voice mail. Instead of telling them to show up at an open house though, why not just give them your phone # at the end of the recording & have them call you. Once they listen to the recording, all of their basic questions will have already been answered & some non-qualified’s will have weeded themself out based on price. Then for those that are still int’d, they would have to call you at a different # to see the place. This also gives you the chance to qualify them some more.

  3. If I was you & I was going to sell this property, I would do an “escrow” agmt. This is different from a bond for deed. The escrow agmt. gives you all of the protections of a L/O plus more. If you’d like to find out more about it give me a call.

  4. Please, let me know where your house is, along with the price & terms you’d consider. I’ll keep it in mind as I come across buyers. Heck if the deal is favorable enough I might even consider it myself.:slight_smile:

Hal, one of the things I used to tell all of the buyers that I worked with is that buying a house is alot like riding a roller coaster. One minute you’re up the next you’re down. Not everything is going to go your way all the time. As a broker it’s my job to make sure that the buyers stay on an even keel. Everytime something happens, I always remind them, remember when we first met & I told you about the roller coaster, well you’re seeing it firsthand now.

I think that advice applies equally to investing. If you allow yourself to go up & down with every ebb & flow of this biz, you will end up dizzy.

I try never to allow myself to get too high or too low. Although, I do feel real good after a deal closes. Other than that though, I try not to attach too much emotion to it, until the deal actually closes.

The stuff you wrote about in your post is nothing but data that needs someone with a level head to interpret it. Certainly, you can find the positives in this, huh? You’ve already got a tremendous head start with all the great responses you’ve gotten.

If you want to talk about it, just give me a call.

Best of luck,

Vic

Re: Best time to show rental property for an open house…marketing rental advice sought, too… - Posted by Charlie

Posted by Charlie on July 24, 2000 at 15:57:37:

I have had a bad experience with open houses. One of my properties, in a middle class neighborhood, is close to a poorer one. During the open house, people from the lower class neighborhood kept stopping by wanting a tour. I couldn’t be rude, but it was a big waste of my time. They took away from time I should have given to people who could afford the place. Also, because of their dress they were causing good renters to be turned off by the neighborhood.

Re: Best time to show rental property for an open house…marketing rental advice sought, too… - Posted by Rob FL

Posted by Rob FL on July 24, 2000 at 09:41:04:

I guess we do things different here in sunny Florida. In 8 years, I have NEVER NEVER put a For Rent ad in the newspaper and NEVER NEVER held a For Rent open house.

I use bandit signs from Home Depot or any hardware store. One goes in front of the house and about 5 go around the neighborhood near main roads with directional arrows pointing toward the property. I always end up with a few dozen calls within the first week. And one thing about the signs is that people are looking for rentals in the area that the signs are located. Newspapers are very general IMHO and ain’t cheap. I can buy 5 signs for $25 and get to reuse them over and over again. A 3-day ad is $60.

I also use the automated system like you mentioned instead of answering the phone myself. The basics of screening a caller is not to determine if the person has enough income or good credit or whatever. That is step 2. The automated screen handles step 1.

Step 1 is all the pain in the rear questions that every single stinking caller is going to ask. I don’t want to repeat the same stuff over and over and over. The questions are: Where is it located? How do I get there? How many beds and baths? How many square feet? Is it fenced? How much is the rent? How much is the deposit? Bla bla bla. I figure at least 50% of the callers get screened out without me even picking up the phone and I still get 20 people leaving messages.

As for the people that do call, I set appointments back to back. I tell person #1 to meet me Tuesday at 6:00, person #2 at 6:15, person #3 at 6:30, etc. I usually pick two days and use 1 or 2 hour time periods depending on how many people are coming. This way if one person doesn’t show (50% of them don’t show up anyway), that is just fine because I have 3 other appointments in that 1 hour time period.

I have been using this approach for about 5 years now and it runs very smooth. Never had a problem finding a tenant. Of course you have to be alot more picky about where the properties you intend to keep are located.

I’ve been at this a little while, … - Posted by Rick Wheat

Posted by Rick Wheat on July 24, 2000 at 06:18:25:

and I never did like holding “Open Houses”. I currently have 13 properties available, and here’s what I do:

  1. Get the place in a showable condition;

  2. Open up all the blinds and drapes so you can see the place inside;

  3. Put applications on the Kitchen counter,

  4. Put an Info Tube or Box with flyers at the front door;

  5. Put a lockbox (available at Home Depot, etc.) on the front door, with a key inside;

  6. Put a sign in the front yard.

When they call from my ad or sign, I answer the call personally. I don’t have a big staff, so I don’t have anyone else to do it that knows as much about the house, (and how to WORK the Tenant/Buyer) as I do. I have them look inside through the windows, and call me back if they have any questions, or if they like what they see.

If they do call me back, I know they’re interested, usually wanting to look inside. I tell they I have to get the access number for the lockbox, and to give me a home phone #/address, and maybe their cell phone # so I can call them back.

I record that info (for security purposes, although I’ve hardly ever had any type of problem), then call them back with the number. I tell them to look around, and if they’re further interested, take the application off the counter, fill it out, and fax it to my office.

Over the last week, I’ve gotten three applications on three houses, had dozens of people look, and met a couple at the property once. ONCE! This works for me.

GOOD LUCK!!!

Rick Wheat

Re: Best time to show rental property for an open house…marketing rental advice sought, too… - Posted by Bobbie

Posted by Bobbie on July 24, 2000 at 05:50:02:

Virtually all of the Open Houses around here are on Sunday, from 1 to 3 or 1 to 4.

Lease Option the House!!! - Posted by Soraya(SanDiego)

Posted by Soraya(SanDiego) on July 24, 2000 at 24:30:54:

I would lease option the house. One year lease Option and give the tenant buyer the right to extend an additional year. (Use Wm. Bronchick’s lease and option agreements.)

If $550 is FMV rent try something less than $600 like $597 etc.

With a $105,000 FMV house you should be able to ge $3500 to $5000 in option consideration easily.

Lease Option the house for $135,000 and give $400 per month rent credit if they pay their rent on or before the first day of the month.

If they pay one day late they lose the rent credit for that month.

(I have tenant buyer’s Federal Expressing me their checks to make sure they are not late with their payments.)

Also make them responsible for the maintenance and repair for the first $300 or so.

If they do not exercise their option to purchase at the end of the first year increase their purchase price by 5% to10%. (Negotiate this up front in their option agreement. I have a 5% increase typed in the addendum to my option agreement.)

Also charge them an additional $3500 - $5000 in option consideration when they extend their option. (I also have this typed in my addendum to option agreement.)

Open House Question:

I tell the potential tenant buyers that I will be at the house between 1 and 4 on Saturday. Make a specific appointment with them and call them the day before to verify if they are going to make the appointment. I also tell them if they can not make the appointment to please let me know.

This is an example of one of my ads for a $100,000 condo. Placed under the Rent to Own section of the paper.

SPRING VALLEY 2br 1.5ba Townhouse $997/mo Build $400/mo Equity while U rent. No bank qual. Owner will carry. Shaky credit OK,
24 hr. rec. msg 858-492-8046

The longest I have ever gone without lease optioning a property is 10 days after the ad comes out on Sunday. Usually I have it lease optioned in three days.

Soraya

Re: Best time to show rental property for an open house…marketing rental advice sought, too… - Posted by Mark

Posted by Mark on July 24, 2000 at 24:23:45:

I’ve used open houses almost exclusively and most of the time they worked great, but sometimes it was just slow.
A couple of suggestions…
First, in the beginning, my open houses were 2-3 hours long. But I quickly got tired of sitting around in an empty unit for 2-3 hours on a Saturday when 95% of the people showed up in the first half hour. So, I made my open house from noon to 12:30 on Saturdays. I figured most people look on the weekend and noon isn’t too early for people. It also gave me a little time to get there early and make sure the place showed well. About 80% of the time, I would get 3 or 4 people there at noon and I’d get an application and deposit check and usually a back up application. It didn’t always work, but it did most of the time. If you are hesitant to make your open house only a half hour long, make sure that you get all the traffic you can while you are there. Put up some signs in front of the house and on the closest busy streets with “Rental Property-Open House” on it the way realtors do for their open houses.
The other thing that may help is I wouldn’t push for the highest rent in the area to start. You don’t want to answer questions, you don’t want to make special trips to show the place, and you are trying for top rent. I’m not saying you are wrong, but you lose some people from each of those actions. You said FMrent was $550. I’d go with that or even $540. This will draw more people to your open house and it will rent. At the end of their lease, raise the rent. If the place stays vacant for one month while you are trying for $600, it will take you 10 months to make up that loss if you succeed at renting it at $600. Also, look at it from your prospective tenants view. Why would they go see a rental that the landlord won’t answer questions about, that is renting for $50 over FMrent and that they can only see at one specified time per week? Give them a reason to see you.
Good Luck

Re: Best time to show rental property for an open house…marketing rental advice sought, too… - Posted by KennS

Posted by KennS on July 23, 2000 at 21:14:51:

I personally like the open house concept. I think more people feel comfortable in checking out the house without the pressure of an appointment. Of course, I would change my view if it stopped working.

I put a lot of info in the ad and I run it Friday/Saturday/Sunday In our biggest paper. Something like:

3bed, 2ba, 1200sq ft, one common wall, new flooring, update kitchen/baths, Nice yard, Must See!
700/month 750/deposit Must Qualify 888-9999 OPEN HOUSE Sat/Sun 1-4 123 W. 4th St. (Near Park/Broadway)

I’ll stop doing it when it stops working.
Good Luck

go buy some chocolate … - Posted by Laure

Posted by Laure on July 23, 2000 at 20:48:48:

HR…the phone just isn’t ringing here either. I talked to my mom tonight and she has one for rent in a town about an hour from here. Her phone isn’t ringing. She said it’s the first time she’s gone more than two weeks being vacant in a lot of years.

I don’t know what’s going on. It’s the darndest thing I’ve ever seen in all my 13 years of Landlording. I sure as heck hope it doesn’t last.

I don’t think it’s you, your ad, or the extra 100 per month you’re trying to get. Hang in there. When it’s all over, we can hold hands and sing “cum bay ah” together around the campfire.

Laure ;- P

One More Thought… - Posted by JPiper

Posted by JPiper on July 23, 2000 at 19:47:10:

Hi Hal:

Had my wife read your post. She reminded me that the other low-end unit in the duplex I mentioned was rented by a gal from Montana (out of state). Get this?.she calls on the ad, has me fax an application, fills it out, and overnights it to me with deposit and first month rent. Couldn?t get to town to see it. Since then I?ve received another month rent, with the third month now coming up. She won?t be occupying unit after August 1. She attending a medical school here, and school won?t be starting until then, and she wasn?t able to come see (or live in) the property prior to the start of school.

Works for me. Receiving rent on a apartment that isn?t occupied and running any risk of damage! What do think the probability was that this gal would have attended an open house? Of course I had to answer several stupid questions from her!

JPiper

Some Thoughts… - Posted by JPiper

Posted by JPiper on July 23, 2000 at 18:58:49:

If I had wanted to hold an open house I would have made it for Saturday or Sunday afternoon?..probably Sunday if it were one day. Let?s say 1PM to 4PM. I wouldn?t personally hold one in the morning on either day, and don?t know anyone who does this.

However, in the last 20 years I have never held an open house. You say the telephone is wasting time?.looks to me like you just wasted some time and didn?t get anything from it. It?s interesting to note that the whole reason for open houses to begin with is NOT to sell the house. Realtors typically hold open houses to 1) attract other sellers (who might be out pricing properties) 2) build a buyer?s list for any house, not just the one in question. The percentage of houses sold directly from open house is extremely small?.I think the National Association of Realtors used to claim it was 3-4%.

Personally, I ?wasted? my afternoon today answering the telephone?.and doing some paperwork, accounting, etc while waiting for the phone to ring. I fielded 22 calls about a lease/option ad I had running?answering the same ?stupid? questions over and over. Matter of fact, I answered so often I got the patter down pretty well. From that I set 4 appointments for next week (after they drove by the house), and am still waiting for some of the others to set appointments. I also got one call wanting to sell a house. I?ll look at that next week?.owner wants to pay someone $2500 to buy the house.

By the way, I know the above is not much of a system for the system players at heart. Personally, I think I make a difference. If you can?t tell, I?m not a big believer in the automated approach to handling things. If automation was that easy, anyone could play this game?.or so I tell myself.

I rented two lower-end apartments in a duplex not long ago at above market rents. Of course, I think that does take a little persuasion, and therefore I again ?wasted? my time by answering the calls myself. In fact, I was so successful at renting one apartment that I had to rent it 5 different times. My guess is they loved the apartment, but realized that they could get cheaper (and not as nice) elsewhere.

I have consistently sold at above market rents and prices over the years, but I always did it personally. And I believe that this personal effort has made a big difference. Of course, in all honesty, I haven?t tried a more automated approach, so my input on that would not be coming from personal experience.

By the way, never used flyers either.

JPiper

Thanks for the advice, Vic; I’ll give it a try (nt) - Posted by HR

Posted by HR on July 26, 2000 at 07:28:56:

nttt

Re: Best time to show rental property for an open house…marketing rental advice sought, too… - Posted by dew

Posted by dew on July 24, 2000 at 14:12:48:

So are the bandit signs just the “Home for Sale” “home for Rent” plastic signs you get at Home Depot? Thanks.

You trust 'em with the key??? - Posted by dewCO

Posted by dewCO on July 24, 2000 at 14:04:41:

You actually give renters the lock box combo? And they actually lock it ALL back up when they are finished looking? And they don’t come back at night to “shop for” (steal) the appliances? I’m AMAZED!!!

You’ve got to be a small towns where no one locks their doors at night, right?

I’ve got one better - all the way from Europe… - Posted by JohnG

Posted by JohnG on July 23, 2000 at 23:09:41:

I have one better.
I rented out the main floor of a wonderful old house that I own to two guys who were in Spain (studying at university).
We did it be email and the father of one of them brought me a check to hold the place for a month and then sent me some checks before his son arrived back in this country. Never even had to answer any stupid questions !!
I never heard of that happening before.

You just never know what tomorrow brings in this crazy business.

Re: Some Thoughts… - Posted by Alex Gurevich, TX

Posted by Alex Gurevich, TX on July 24, 2000 at 17:28:04:

In general I don’t show houses, I do still show duplexes and 4-plexes, some of them are in the areas where I just can’t allow people to go there on their own. One trick I learned with appointments is to make them call me 30-45 min before the appointment. I am usually in the office doing work. If they call - I’ll take off and meet them at the property. If not, I just continue my work and my day is not messed up. Once I started following this little rule I think I’ve gone from 40% no show appointments to about only 5% or even less. I also always ask for their cel. phone # - everybody has one these days - so I can call them from the house.

All the houses (and duplexes too) are listed on the Internet. The site is advertised in the newspaper. They get all the features, directions, schools information, pricing, general terms, financing programs (for houses) on the web, they fill out an application on-line.

Once I get the app, and assuming I can approve them (and they have enough down for L/O) I e-mail them the code for the combo lockbox. They go see it and e-mail me back if they are interested. Then they come to my office with checks and we sign the paperwork. They get the keys right out of the lockbox and later on I’ll stop by and take it off the house.

This accomplishes several things.

  1. I don’t need to talk to anybody and repeat 50 times per weekend over and over again the features, pricing, what L/O is, etc.
  2. Frees me up from trips to show the house.
  3. Weeds out lookers who would not even bother to fill out the application.
  4. Gets me all of their personal/financial information before they can get inside.
  5. Removes the fear of confrontation out of buying process for tenant/buyers.
  6. I don’t need to “sell” anything. The financing terms and the condition of the home will do the selling.
  7. Allows me to only get in personal contact with people who already raised their hands and said they want the place.
  8. Since they have to go through the Internet, they are usually a little more educated, sophisticated - I get better clients.
    (Had to take a 2 seconds break to pick up an application that popped up on my FAX machine.)

To sum it up: I only get to talk to people who (I already discovered) have the downpayment, the ability to make high monthly payments, have seen the house and want to get it. My world has changed dramatically when my business model changed to be that way. Even over the last 6 months I noticed that a number of people getting to me via WEB is growing and growing. I expect that trend to continue. I just hope to figure out more ways to drive the potential buyers to the site, so I ALWAYS have more buyers than homes.

Re: Some Thoughts… - Posted by Mark Vidales

Posted by Mark Vidales on July 23, 2000 at 23:36:16:

HR:

I just had an open house on a real nice duplex on Saturday from 1-3 and got 8 applications with $25.00 each for their credit checks. I like doing open houses.
If they are serious they will fill it out right there. If they really want to see it, I’ll be there on my time 1-3 then I leave if they don’t show it’s their loss.

Too many times if you are in a hot rental market you will get tons of calls and trying to meet everyone at their convenience and then some of them not showing up is a real bummer. So I like having open houses.

Re: Some Thoughts… - Posted by Tim Jensen

Posted by Tim Jensen on July 23, 2000 at 21:28:10:

Jim,

I agree with you 100%. I just can not understand why people are so against answering phone calls themsleves. I have found that by talking with the person, I can figure out what kind of tenant they will be. Also, it gives me a chance to really sell the people who sound promising.

Also, I like open houses. The thing is that I don’t call them that. I just tell the people “Well can you meet me there tommorrow around 5pm?” This gives them the impression that it is an appointment, I have found they are more likely to show up.

Finally, I make sure the people drive by the place first. This has saved a lot of time.

Take care,

Tim