Struggling With Properties That Won’t Lease?
Many of my clients have current concerns with properties that just won’t lease. Deep down in our Property Manager psyche we know that if the property is in satisfactory condition and marketed correctly it usually comes down to the price. Generally most troublesome vacant properties, despite anything the landlord thinks is causing the extended vacancy, it really does just comes down to the price.
But more often than not, for some strange reason despite us being the ‘expert’, the owner won’t listen to us to reduce the price to meet the market and we are stuck in the middle of the stress of trying to find a tenant and nursing the frustrations of said Mr Landlord.
I have many tactics for getting these troublesome properties leased, and dialogue for getting the owner around, but today I wanted to comment on not the problem, but potentially the cause.
The more I delve, I see that the issue usually stems from well before it’s been on the market for weeks and weeks, right back to when the vacate notice is received, and even prior to that. The issue starts with failing to ensuring the owner has a realistic view of the current market value of their property.
If we know ahead of time that the rental value of a property is or has fallen, why aren’t we communicating this to our landlords ahead of time, or at least giving a realistic picture at re-lease and rent review? I know why we don’t want to, because it will take more time, but think about it, what if we did?
Unfortunately more often than not we fall into a trap at the re-lease.
Don’t feel bad, I’ll admit it, I’ve done it many a time. The vacancy notice comes in, we see that it’s currently rented for $500 a week, and without much hesitation, we advise the owner to re-list at the same price, sometimes more. Even sometimes when we know it isn’t likely to get that much, especially not anymore. Often leaving ourselves with a bigger problem down the line.
Have you fallen into this trap when re-leasing property?
Why do we so often do this? Perhaps because subconsciously even though we know what the market is doing, it’s easier for us than doing a complete market review, providing the owner with a realistic honest picture, and sometimes having the hard conversation that I’m sorry Mr Landlord, your property is worth LESS now than what it was 12 months ago. Queue onslaught of that being our fault too. Feel familiar?
I’m sure there are some of you out there correctly educating landlords on the rental market at the time of re-leasing but for the many of us that sometimes aren’t and are taking the easy road out, think about those properties that you now have vacant for lease. Think what if the owner had been advise about the reduced value of their property weeks or even months ago, and provided with solid financial advice on the benefits of pricing to meet the current market, not just to get what they were getting before…. would we still be in the same position?
I know there will be the one or two on your rent roll that just won’t listen. But I know that there are a majority of landlords just waiting to be more educated on the market and screaming for us to lead them through. The next vacate notice you receive, try to treat it as if it were a new business property and go through the same market review pricing exercise that you would at that stage, re-educate the landlord on current tenant demand, comparable properties, vacancy rates, days on market – and do what it takes to help them minimise their vacancy and truly maximise their return.