Sometimes you have to ‘sell’ a rental property
IT appears obvious that at some point your investment property will most likely be sold to another owner.
But I’m not referring to that in this instance.
This week I want to talk about “selling” your investment property as a great rental option to prospective tenants, not buyers.
It’s likely many of you will have no idea or had little direct experience of having to encourage tenants to commit to your property.
I’m sure before you bought you did your research, carefully selected and negotiated well — therefore every time one tenant vacates, new ones are queued at the agent’s door.
But even in the strongest, most secure markets and best locations, at some point even after decades of ownership a slower market could prevail.
Then there are landlords who have witnessed the phenomenon of the rental property without a tenant.
This situation is totally frustrating as the weeks seem to be never ending, costing a small fortune and you simply can’t understand why.
Recently some friends of mine, about to build, had sold up and needed a rental home for six to 12 months. Acquiring one would be a simple task, you would presume.
Then I hear of agents not calling them back, listings being let but still advertised — all the usual problems.
So when the opportunity came to tag along with them on a series of three inspections, how could I resist?
Agent one told us the home had been empty a long time as he’d been on holidays.
The home was clearly dated and cost too much to rent, yet no attempt was made to encourage us to try an offer for a speedy move in.
In fact, no salesmanship was employed in any way.
Truthfully, I got the feeling it was all a bit of an inconvenience us being there.
Agent two, although very nice, met us around the corner initially as apparently others were expected.
So we headed to the house, waited and waited, then saw her drive past the end of the street.
Now rather concerned, we attempted to call the number on the listing. It was automated and made about as much sense as a government leadership battle.
Yes, she was lost, but eventually all came good and in we went.
Our suspicions were soon confirmed as it was revealed this was a home she had never seen. Or seemed to know anything about. But, as I said, she was very nice.
Agent three was very good, a far better performance — just late.
As a landlord myself, generally I’m happy with the service I receive from managing agents.
But there have been occasions when it seems there is a distinct lack of action, no sense of urgency, or creativity.
It has been me that has taken the proverbial board by the post and got things moving.
I realise there are many fantastic letting and managing agents out there and, when many homes seem to let so easily on listing, it’s hardly surprising that some agents arrive at inspections knowing tenants are ready to sign.
This, I believe, has led to some rental staff not believing they require any form of sales skills — all they have to do is turn up, applications in hand. Getting the address and time right is enough.
But what happens if those market conditions change, or the home is of a higher value, where demand is less?
Perhaps the property is a one-bedder and everyone wants two. Maybe the home is simply something different from the norm, then what?
Tenants may need some encouragement to commit.
Agents need to know the key selling points of the home. Maybe a deal could be done as most landlords will tell you a little negotiating is better than no rental income for weeks on end.
Some landlords are concerned a new lower agreed rent could affect the future sale value and that can be the case.
I have the solution — don’t reduce the rent but perhaps offer a free week or two. Think outside the box to get the deal done and the investment will be back on track.
So keep your agents in check, look at the adverts, keep an eye on the online listings and other properties s similar to yours. Is your price right? Should you consider improvements or incentives?
If you are really concerned, talk to your agents and if you know someone that could mystery shop on your behalf to check out their performance, why not?
You never know, there may come a time when you really do need to sell your rental property to a tenant.