Today’s REI Classroom Lesson
For rental properties, a vacancy means you’re losing money. As Pete Neubig shares, you have to buy it right and price it right for it to rent quickly.
REI Classroom Summary
Pete Neubig goes over some helpful tips to get your property rented quickly that you NEED to listen to!
Listen to this REI Classroom Lesson
Real Estate Investing Classroom Show Transcripts:
Mike: Welcome back to the flipnerd.com REI Classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Pete: Hi. My name is Pete Neubig. I am cofounder of Empire Industries Property Management, located in Houston, Texas. And today I’ll be your REI Classroom host for renting your property quickly.
Mike: This REI Classroom real estate lesson is sponsored by uglyopportunities.com.
Pete: Number one, price it right. If you purchase a home wrong and you need, let’s say $1800, to make your PITI, but the market is $1700, you will likely never rent the property for that amount. So obviously, number one is buy it right.
Number two is you’ve got to price it right. Even if it’s the best product in the area, a lot of times it does not rent for higher than the market rate. So our experience, we manage over 500 homes throughout Houston, and from our experience in most cases renters will not pay more than the market rent.
Remember, if you lease a property quicker, even at less than what your asking price is, you’ll still end up profiting. I’ve had too many of my clients not take $50 less in rent, and then their property stays on the market for an extra 30 to 60 days, finally coming down on the rent. And even if they got the extra 50 bucks, what did it cost them when the rent is $1500, or $2K, or $4K a month. So basically, don’t be penny wise and pound foolish.
Number two is use a professional to lease your property. Too many investors want to do everything themselves to save money. What does it cost you to have a home not leased or putting in a bad client? Find a professional realtor who is experienced working with rentals and you can get your property leased to a great resident. Your time can be better spent finding better deals and not having to go and show your properties, and not have to run applications.
Have the best product in the area. The old saying is “best product, best price.” This does not mean install granite countertops if no other homes in the area have granite countertops. It can mean that, but you want to make sure, you want to look at what’s in the area.
You want to have a clean, functional property, but you also want to have the best product. So a clean product that presents well and has all the amenities that the rest of the homes in the areas have. I cannot tell you how many times an investor did not want to put a fridge in one of our homes, in one of their homes. It sits for weeks, he breaks down and listens to us and we put the fridge in and we rent the property, like, literally the next day.
So again, you want to have the best product out there, again, not overdoing it. I know some new investors, they tend to over create the [inaudible 00:02:53] ready and then install all the stuff that’s new. You don’t need stainless steel appliances if everybody else has black appliances. You just need good, clean, maybe even used, if that’s the case, or new appliances.
Outside curb appeal is very, very important. Spend, it’s a cheap way to make your property look a lot better. And spend some money on the curb appeal. Just cutting the lawn is not enough. Putting in some plants and flowers goes a long way. Again, people are looking at that property and on the outside, the curb appeal, that’s going to get people drawn in to go inside the home.
So if you have a great property on the inside but you have really bad curb appeal, the grass is overgrown, or it’s dead, or there’s no flowers, weeds everywhere, most likely the people aren’t going to go in, because they think if you’ve taken care of the outside of the house like that, they’re never going to get into the inside to see the beautiful home.
Advertise everywhere. That means online these days. By using a professional they typically have their website turned to a local multiple listing service which then spiders or advertises out to hundreds of websites. And it’ll also have a professional sign out front. The days of advertising in your local green sheet, in your local paper, we have not done that in a few years down here in Houston. I don’t recommend that, but I do recommend getting it out on the web.
Using the MLS is a great way to do it, having a website of your own that can spider out, our management software it publishes and syndicates out to over hundreds of websites. So you get your property out to the Zillows, Trulias, all over the place. And the way you do that is you do it through the MLS, it does it for you. So you only have to do it one time and it spiders out numerous times.
Do not advertise low income or bad credit or no credit. You will then attract those people, and those types of folks will not be good residents for you. So you may get your home rented pretty fast, but then the chance of you putting in a bad tenant is going to be really, really high. It is better to keep the property vacant than putting in a bad tenant.
Get back to people ASAP. At Empire we use a call center that is available 10 hours a day to answer the phone in less than one minute, 7 days a week. Do not be the one to answer the phone. Have your professional realtor answer all the inquiries. But test the realtor. Call that realtor, see if you’re going to get a call back. Is their voicemail full? These are people that you probably don’t want to do business with. If a realtor uses a call center, even better.
You want everybody who is interested to be called back. It’s very important. If you don’t get a call back within 10 minutes, typically they’ve gone on to another property and somebody else has just rented that property out to them.
And check on your realtor weekly. You should be getting updates from your showing service and from your realtor weekly. You should review all feedback with your realtor to make sure the house is what people are looking for. We use something called centralized showing service here in Houston, and we encourage any realtor that shows our properties to give us feedback.
If your property is dirty, I want to know. If the property needs upgrades, I want to know. And as a realtor and a property manager, I can take that to the owner and we can create a better product to get the property leased really quickly. It doesn’t take anything to go sweep up some bugs, or to put a fanlight in the bedroom if you’re getting negative feedback on that.
And so, those are my tips on how to get your property rented very quickly. Again, my name is Pete Neubig with Empire Industries Property Management. You can find us on the web at EmpireIndustriesllc.com. Thank you.
Mike: HomeVestors, the We Buy Ugly Houses folks, is a franchise system of hundreds of real estate investors that have purchased over 65,000 houses. If you’d like to learn more about the most powerful real estate investing system in existence, whether you’re a pro looking to take your business to the next level, or whether you have no experience at all but a burning passion to be successful in real estate investing, please visit flipnerd.com/ugly to learn more.
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