Sunday, November 27, 2011

Finding a Renter Tougher Than Expected

Everything was all planned out.  Up-front research showed that rents in the area were between $1145 and $1200, so setting the asking rent at $1150 seemed appropriate.

It should rent within a couple of weeks - tops.  Yeah, right.

We started advertising on Craigslist several days before we closed on the purchase.  Then, we put a sign in front of the house.  A couple of weeks later, we decided we'd also advertise in the classifieds section of the local Sunday paper.

We got some calls, but definitely not the 10 calls per day that I had hoped for.  Most disqualified themselves - or disqualified the house - immediately.  Things like, "Do you allow pets?"

"Yes, with a pet deposit and an additional rent per pet per month."  

"Okay, is the backyard fenced - we'll need a fenced backyard." 

"No, it's not fenced."

"Okay, thanks - the house isn't for us."

So it goes.

We did do have an interesting possible renter.  It's a boyfriend-girlfriend couple with a child that they had together.  The boyfriend apparently has good credit and the girlfriend does not.  They told my partner that they want the house and were mailing to me their application and a money order for the application fee.  That was almost two weeks ago.  If we hadn't heard anything from them, I'd write it off,, but when we check in with them, they say that they sent it.  They've even followed up with my partner to check on the status.  

No idea what's coming off of that one, but I haven't received anything in the mail.

Hope we get a qualified renter soon.  We've already talked about lowering the asking rent from $1150 to $1095.  Crossing my fingers...


2 comments:

niterainbow.com said...

I have recently bought myself a property and did some calculations.

It looks like for the $240,000 after all the deductions (maintenance, insurance, taxes, administration) it will leave us about $4,000 a year.

We could raise it by additional $1,000 a year but that would mean we have to spend time administrating it ourselves...

What are you projections?

Nieuw said...

I should update everybody on the progress. We did rent the house to the boyfriend/girlfriend couple. We had one of their parents sign as a guarantor. We got our rental rate of $1150 and the lease started on 12/15/11, which is only 5 weeks from purchase. So we're doing well!

We'll be making about $4,350 per year after principal payments, interest payments, taxes and insurance costs. That's a 23% cash-on-cash return. We did have a repair that we had to do after they moved in and it will change my % return number, but I haven't calculated yet.

Our cash flow looks similar, but we invested only about $100,000 (purchase price + repairs). Where are you doing your investing?