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The obvious answer is to wait it out but was just wondering if you offer any incentives or do something which ensures your property is leased out during Oct-Dec. Despite planning in advance I came about a situation where the tenants left after start of school year. Now the property is vacant since Oct. I doubt if someone will move during holiday season in a suburban location. Was wondering if landlords can share their story
1) How to ensure this situation doesn't happen again.
2) Is January a good time to find tenants
3) Should you compromise your norms during these slow months such as not so good credit, poor employment history etc or allow month to month until good time period....
First off, I have a clause in my lease that says that I don't allow leases to end in November, December or January. I don't schedule long term leases to end in those months, and I don't accept notices given for those months on month to month leases. When a tenant goes month to month, if we don't renew the lease long term again, they are given written notice reminding them of that fact, and stating that if they are still there November 1st of a given year, that serves as their agreement to a 3 month lease to get them through the winter each year. If a tenant needs to move during those months, then they owe rent until I find a new tenant, or until the end of January, whichever comes first. Harsh, but it avoids a lot of problems.
Second, sometimes it still happens. Sometimes life has unavoidable situations that require a move in the winter. When it does, I tend to look for people needing a short term lease as well as longer term. People looking to buy a home in a few months are the best, because they should have great credit. That puts your schedule back into a nonwinter month. I try not to ever compromise on my other criteria, because when I have, it has almost always come back to haunt me. I'd be more likely to lower the rent or offer a move in special than take a marginal applicant. "Christmas special: pay no rent for first 2 weeks" or something.
Overall, January is better than November or December in my area, UNLESS it is a heavy winter with lots of snow. Then January can be worse.
It isn't impossible to find people this time of year, only harder. As I said, life happens. I have 3 people moving out this week. Two bought a house (they had been looking for a while and this is just when it came to fruition) and one had a military transfer (different rules on that, which we comply with). We already have the military one rerented. One of the others we expect to have to do a lot of updating, as the prior tenant lived there 9 years, so we are letting them off penalty free, and will not even advertise until the work is done. The 3rd one is in the extremely low rent range for this area, and I'm not even advertising it until the tenant is out because I expect to get bombarded the moment I put up the ad, even this time of year.
But I have another person moving out in 2 weeks. We've been looking for more than a month for a replacement tenant for that unit with no luck. We may have to resort to a special to get it rerented before the end of the year.
There is really nothing you can do to prevent vacancies during the holiday season. It isn't legal to chain tenants in the basement, and they can leave anytime they want, lease or not. You can not stop them. If they are breaking a lease, they should owe you some money, and you might be able to collect that, but you can not force them to stay.
If you do leases, try to get them all ending year to year in the spring. That helps but doesn't entirely eliminate vacancies in winter. If they want to go, they go. Or if they lose their job and have no income, your best option is to get them out rather than to have them dig in, refuse to move, and not have any money to pay the rent.
There are people moving during winter month. You have to be extra careful because a higher proportion of those moving during snow weather are moving because they have been evicted. But there will also be people moving because their landlord sold their house. House sells end of August, a couple of months of escrow and the tenant is out looking for a new place the end of October.
There are fewer tenants looking, so your place has to be attractive. Clean, bright, and warm. Yeah, it sucks to pay heat on an empty house but a cold house feels hostile. Turn the heat up a bit and light all the lights when someone is coming to look.
I don't offer incentives, but some landlords do. That doesn't increase the number of tenants available, but it might snag you one of the few out there. Holiday special, half off first months rent, that sort of thing. I don't want to get into it because I worry about what sort it would attract (entitled) but other landlords do it and get tenants that way.
I get winter tenants the same way I get tenants at any other time. Same advertising, houses are very clean, well repaired, and in excellent locations. I set rent at full market rate because I don't like to raise rent when I have good tenants, so I like to start at full rate.
It takes longer to find a tenant in winter weather. So you have to just keep working on it.
Another problem with a winter vacancy is that a lot of people looking during the winter are people who are just moving in fora new job and they just want any place to light and unpack while they look around. That means they won't stay long. If you put them on a one year lease, they move at the end of the year and leave you with another winter vacancy. Best to give them a short lease that ends the last day of April and then renew them for a full year if they want to stay. If they are short stay, it is better to get them out for the first of may than for the middle of November.
Thanks everyone for your feedback. This situation is bit irrelevant but there are 4-5 houses in neighborhood which are for sale and couple of them available for rent in the same lane. They are bigger houses but still due to the competitiveness I dropped the rent by $100 from what the previous tenant was paying. I am getting all sort of inquiries about pets and short term leases etc but the only people putting application are the ones who have bad credit or a low paying job. Also I am getting really low ball offers and people with foreign bank accounts and no credit or ssn etc. I am ok with pets with deposit but seems like its not going through.
I know that the area has a good location and school but perhaps its that time of the year so I was just wondering how to pass through this holiday period
You just do what you have to do. We get a few vacancies in winter and we just hunker down and do what we have to. I will initially put the ad out there at regular rent and give it a week or 2 to see if I get any hits. If none, or at least not any good prospects that qualify, we will discuss at that time whether to offer some kind of incentive. It could be $100 off first month or 1/2 off first month or if they want to move in the middle of a month we will let them and not charge for that partial month. There is no rhyme or reason each time we end up with a winter vacancy so it is all based on how much we really want/need to get it rented, how soon, how many full apts we have at the time, etc.
So, bottom line is that you, individually, have to weigh out whether to just leave it vacant or keep trying because it is all subjective depending upon your individual situation. And every area and landlord situation is completely different.
But we always continue to try because we have nothing to lose by doing so. The apartment is already rent-ready so why not? Even if it might not rent for a month or 2, we still come out financially better off if it does eventually rent instead of waiting for that perfect time and not collecting any rent and and also having to pay the utilities. There are always people relocating for work/job transfers, homes selling, divorces, kids moving out of home or relocating to a bigger city, etc, etc because the weather does not determine when most of those situations happen.
If we do rent it in the winter we always advertise it as a shorter initial lease term so it renews at a better time of year and then convert it to an annual lease thereafter.
And as far as what Lacerta does with not letting tenants out of MTM leases during winter months, that would never fly here because as OWS stated, you can't force people to stay and be penalized on a MTM lease for moving if they gave their required notice. So, I am frankly surprised that they are able to get away with such a policy/clause in their lease.
My personal opinion is that if there are not many tenants looking to move in during the holiday season, there just aren't that many people. No amount of incentives will create prospects if they are just not there. Lowering rents, giving abatements, throwing in incentives just attracts those who probably wouldn't be acceptable at full no incentive rates. However, keeping an existing tenant during the holiday season is a whole lot easier. If you're going to throw in incentives, throw them to those already renting with you to stay until after the new year. I'm sure they are no looking forward to moving during this time as well. Make it worthwhile for them to stay another month or two.
I've got a unit up tomorrow, the 30th, that I didn't get proper notice on so Dec is paid. I've gotten 10 calls on it today and I can't even show it until Thursday. The rent is up $100, from $1,100, over last year and I will have a lease signed or a holding deposit by the end of the weekend. That tenant was from a vacancy on 10-30-15, an early termination at that, and they took possession on 11-16-15.
I credit that to two little words that I put in every add and I strongly believe that alone is what fills all my vacancies in such a short amount of time. Well that and how well maintained my units are.
I've got a unit up tomorrow, the 30th, that I didn't get proper notice on so Dec is paid. I've gotten 10 calls on it today and I can't even show it until Thursday. The rent is up $100, from $1,100, over last year and I will have a lease signed or a holding deposit by the end of the weekend. That tenant was from a vacancy on 10-30-15, an early termination at that, and they took possession on 11-16-15.
I credit that to two little words that I put in every add and I strongly believe that alone is what fills all my vacancies in such a short amount of time. Well that and how well maintained my units are.
That's one. The other is to accept less rent that you otherwise prefer.
Quote:
Should you compromise your norms
such as not so good credit, poor employment history etc
No. Never compromise on those standards but a solid tenant with lower income
levels can be, is almost always, a better choice than a weak tenant with higher income;
let alone no tenant at all for extended periods.
eg:$1000 x8mo is the same NET income as $666 for all 12 months.
Quote:
...or allow month to month
Actually... you should try to have, to seek M2M tenancies.
At the least... have your lease automatically roll over to such on renewal.
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