Offer good tenants a property they'd like, or find new tenants (apartment, lease)
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I own rental properties -- a townhouse and some single family homes. A couple who rents a townhouse from me is a very good tenant. They rented the townhouse because they simply couldn't find an affordable SFH. Any time I have a SFH for rent, I literally get hundreds of responses to my posting on Zillow. So, I don't have trouble at all finding tenants.
The townhouse, however, can be a little more challenging to find good tenants.
One of my houses will be coming available in the next few months. Since I have to recruit for new tenants, it would be easier to simply do that for the SFH. However the angel in me is whispering in my ear to offer it first to my tenants in the townhouse. The rent is the same for both; the townhouse is in a more desirable location as far as schools (not an issue for this couple, no kids) and parks so that's why the rent is the same for the townhouse as the single family house.
I own rental properties -- a townhouse and some single family homes.
The townhouse, however, can be a little more challenging to find good tenants.
WWYD?
I'd leave sleeping dogs to lie.
But I'd also look into why it's been so much harder to rent the townhouse.
What with the more desirable location, schools and parks... it doesn't make sense.
The obvious and first step is PRICE... really investigate the comps.
If the market is f'rinstance $800-1000/mo... the tenant who qualifies for $1000 is the most likely to move soon.
That leaves you with more turnover expense, vacancy time and other aggravation.
Often... the tenant who qualifies at the lower ($800 or $850) level... will KNOW they have a sweet deal
and for that reason alone are more likely to settle in for many many years.
eg: $825 x36mo (29,700) steady as a rock is mo betta than $1000 x 30mo with 2 turnovers leaving you empty
Do your own math on what the real net rents received have been coming out to over several years.
Last edited by MrRational; 02-28-2017 at 07:48 AM..
Your TH tenants will likely vacate when they do find a suitable SFH. So you'll eventually be searching for new tenants for the TH anyway. If you offer them the SFH, you will at least be keeping tenants that you know are good.
That's just my thought as a non-landlord.
OP, have they asked you to let them know if you have anything become available?
If they're still looking for a SFH, it's possible they're looking on Zillow anyways, and might find the ad.
I would say "let sleeping dogs lie" UNLESS they specifically asked you to contact them, when a SFH becomes available.
Or if you had promised, "I'll contact you when a get a house available." If you casually said, when they applied for the unit, that you would let them know..then you should just keep to your word.
SFH are so much better, as far as noise/privacy, so I can understand their want/need.
If they've ever come to you in the past saying they'd have interest in a home you have then I'd probably do the nice thing and offer it to them. They will leave eventually anyway if they are looking for a SFH and you will be left having to rent the place. So why not try avoiding having to do much work at all on the SFH?
But I'd also look into why it's been so much harder to rent the townhouse.
What with the more desirable location, schools and parks... it doesn't make sense.
The obvious and first step is PRICE... really investigate the comps.
If the market is f'rinstance $800-1000/mo... the tenant who qualifies for $1000 is the most likely to move soon.
That leaves you with more turnover expense, vacancy time and other aggravation.
Often... the tenant who qualifies at the lower ($800 or $850) level... will KNOW they have a sweet deal
and for that reason alone are more likely to settle in for many many years.
eg: $825 x36mo (29,700) steady as a rock is mo betta than $1000 x 30mo with 2 turnovers leaving you empty
Do your own math on what the real net rents received have been coming out to over several years.
Its been a bit more challenging, as stated in my OP.....not "so much harder." I know the market extremely well and always price my places accordingly. Thirty years in this business so I get the math. But your comments are very useful for the novice LL.
The townhouse rents for the same rent as almost every single other rental unit in this complex (most are owner occupied) except for the ones with very high end finishes or those that are really dated (they usually lease for $1300+) Its a very, very desirable school district and the complex has a sweet location on a very popular walking trail.
Last edited by WorldKlas; 02-28-2017 at 09:09 AM..
Reason: To remove rental rate
Your TH tenants will likely vacate when they do find a suitable SFH. So you'll eventually be searching for new tenants for the TH anyway. If you offer them the SFH, you will at least be keeping tenants that you know are good.
That's just my thought as a non-landlord.
OP, have they asked you to let them know if you have anything become available?
They have NOT asked. However, when they applied to lease the TH, and I asked why they were moving they said they really had wanted a SFH but couldn't find one in the area that was affordable so at least the TH offered a small yard for the dog and less an apartment feel (its an end unit).
Give them the address of the SFR and screen them like any other new tenants, new fees, everything. Sounds like they are planning a move anyway.
It costs me a Realtor's commission to re-rent, cleaning the old property, having it shown, and paying another Realtor's commission etc. to rent the new property. I'm not going to just transfer over an old tenant with no charges. Of course at least you can skip the credit report check.
I had such a situation and the tenant wanted early out of their lease with no termination fee. I had to refuse them, but in any case I had no other vacancies.
Give them the address of the SFR and screen them like any other new tenants, new fees, everything. Sounds like they are planning a move anyway.
It costs me a Realtor's commission to re-rent, cleaning the old property, having it shown, and paying another Realtor's commission etc. to rent the new property. I'm not going to just transfer over an old tenant with no charges. Of course at least you can skip the credit report check.
I had such a situation and the tenant wanted early out of their lease with no termination fee. I had to refuse them, but in any case I had no other vacancies.
You really need to learn how to recruit and screen your own tenants. I am only in my area about half the year and I can do everything but show the property online. I have actually had my departing tenants show the property to my first choice screened tenants. DM me if you need guidance. Be glad to assist.
I already know how to screen my tenants. My Realtor gets the applications, I do the screening one at a time starting with best looking application. I run their credit and either accept or reject. If reject, I collect the next application fee and repeat.
Show the property online? Have the departing tenants show it? Sounds very unprofessional to me. But if it makes your boat float, good luck!
Note that I am an out-of-state landlord. My excellent Realtor is essential to me, and well worth the commission.
But I do my own screening, thank you.
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