The current market demands a more aggressive approach to marketing a single family rental property. Gone are the days of simply putting a “For Rent” sign in the yard, pricing it at the high end of the rent rate range (maybe even higher), and it actually renting in 21 days or less.  Now, the property has to be perfect,, and it has to be priced perfectly from the start.  

 

Property Condition Matters

While the dirty driveway and scuffed walls haven’t mattered much in the past–because, “hey, it’s a rental”–they do now.  We’re not suggesting a complete remodel, but you want your house to be the one they pick as they walk in the door.  Yes, rents are down, but this might be the time to put some money into your rental.  Old plastic blinds starting to yellow?  Are some of them broken?  Replace them now.  It’s less expensive than pulling the next mortgage payment out of your pocket and small things like these help show a potential renter that the landlord actually cares about the property.  The market isn’t moving very quickly, be smart and use some of that market time to update or refine it.  You have to also remember, expenses on an income producing property can be a tax deduction!

 

Price Reduction or Another Mortgage Payment?

Days on market doesn’t necessarily matter to a renter, it doesn’t signal a problem with the property like it does when selling. With rentals, it typically signals a problem with the price or condition.  The longer a property sits on the market, the more mortgage payments the owner has to make out of pocket (ie: negative cash flow). We still see owners who refuse to concede a lower rent rate just to get it leased. The math is simple, $50-$100 lower may get it rented, or you’re paying another mortgage payment from your pocket.

 

Lower Priced Homes Will Rent First

We keep a constant eye on other properties for rent competing with yours.  On a weekly basis we generate proprietary reporting on the activity of every active listing we have, as compared with the neighborhood for that particular listing.  We know how long it’s taking for properties to rent in these neighborhoods and what they’re renting for.  When there are multiple comparable properties available in a given neighborhood priced lower than yours, they will rent first, given similar attributes, of course.

 

Be Strategic

Take lower rent now to get it leased.  Get the cash flowing and a stable tenant in the property.  Happy, good tenants stay longer.  Moving is stressful and expensive, most people don’t want to do it unless there’s a motivator.  Minor rent increases at renewal time don’t usually create that motivation.  Increases to the tune of $900 would be a motivator.  Hopefully, by the time the next tenant moves out, the market will have stabilized and demand will have returned to normal.

In conclusion, while the current single-family rental market in San Antonio presents challenges, it also offers opportunities. Landlords who understand these dynamics will be better positioned to make strategic decisions about their properties.

 

We are not tax professionals or attorneys.  Please consult the relevant experts in those fields.