The value of making sure your property is rent ready before placing it on the market can hardly be overstated. However, when the property is vacant and no rent money is coming in is precisely when property owners are loath to spend money to improve the property. Understandable but unwise. Making sure a property is clean, smells good, is in good repair, and is ready for a Resident to move in will save you money by decreasing the cost of vacancy and increasing the rent rate. We have seen it time and time again, properties that are not rent ready…do not rent. The longer the property sits on the market, the lower the rent price goes.
Owners are often anxious and in a hurry to get their property on the market. Let’s look at what happens when a property is marketed prematurely.
In the first week a property hits the market it will receive the most traffic of any subsequent weeks. Drive by traffic sees the for rent sign on their first trip past the property after the sign goes up. They set up a showing and are turned off because the property is not ready. People looking online note that the pictures show a property not ready to rent. These people will cross the property off their list and not return, even after the property is rent ready. All these great first week leads that were generated go to waste. Its like having one shot of Nitrous Oxide on your race car and hitting the “go fast” button before the car is in gear. The engine revs, but the car doesn’t move. But worse, now that you have spent your Nitrous Oxide you don’t have it when you need it during the race.
Some owners will argue that they are trying to prelease the property like apartment complexes do. The thing they forget is that apartments often keep one or two units vacant and staged with furniture specifically for showing to prospective tenants. Owners of single family or small multifamily properties often don’t have this luxury.
A second problem with marketing before the property is rent ready is psychological on the owner’s part. Because the property is marketed, owners lose the sense of urgency to get the property rent ready. Owners will reason, “We haven’t found a Resident yet, so there is no reason to finish making the property rent ready. I will finish once a Resident is found.” On the other hand, if the property is not marketed until it is rent ready, here is a huge sense of urgency to finish up in order to get the property on the market.
Finally, if the property is not rent ready, we don’t really know if price is the reason it has not rented. If everything is rent ready and the property is not renting, then the price is usually the cause. But if the property still needs to be cleaned, we might ask the owner to lower the price, when price is not even the issue.
Waiting to make a property rent ready may improve cash flow in the short term, but will cut into profits in the long term.
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I had the opportunity of working with Real Property Management over the course of a year as a tenant of one of their managed properties in Sioux Falls, SD. They were more than accommodating and extremely helpful whenever we had an issue. We were always treated as a first priority. Based on firsthand experience, I would highly recommend them to any property owners looking for a top-notch property management team!
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