How long does it take to lease a property?

Hi,


This is my first time being a landlord and I’m wondering how long it generally takes to rent out a property. I know this is sort of like a ‘how long is a piece of string’ question, but wanted to get some feedback.


So we’ve moved out of the townhouse we were living in and it has now become a rental property. The property went up on realestate.com.au (1E Harold Road Springvale South Vic 3172 - House for Rent #417480994 - realestate.com.au) on the 8th January. There was the first open for inspection on the 14th January when we still had all our furniture in there as we didn’t start moving out until the 15th January. The agency said there were around 20 people that came through who in her words said it was really nice and all took application forms. Result was that they received only 1 application and that was from a group of 3 adults who had never rented before (a couple and one other adult). Advice from agency was that they should hold another couple of opens.


Due to us moving out and basically getting the house ready for viewing again, another open was held last Wednesday, Friday and Saturday. Around 6 people came through on Wednesday and also on Friday and one family on Saturday. Again she said they all commented how nice it was and they all took application forms. One application came through on Thursday but references came through and weren’t very good. I haven’t touched base with her today to find out if there were any other applications that have come in.


Having never leased a property before, I’m getting a bit stressed that it’s taking too long and the amount of applications we’ve received (only 2) is very low.


Advice from the rental manager is that the rent advertised is ok (ie, it’s not too high) and she’s not too stressed about getting it leased. Vacancy rate for the area is low (under 2%).


Any tips/advice/feedback?


Cheers,

 

If you trust your agent then it takes as long as it needs. Agents trying to find the best possible tenant to look after your place. Even if it takes another couple weeks to find a suitable tenant then it's worth waiting. A bad tenant will easily cost you more than the additional couple weeks of waiting. As long as the agent is providing feedback after your inspections and has reviewed the rents in the area then it will be fine. I've had to wait 6 weeks for a tenant only once, other houses usually within 2 weeks.
Place looks very livable/presentable, it will rent.

 

Chill, it wasn't actually available for rental until after the 15th at the earliest? Vacancy rate in the suburb is low so provided it's correctly priced you should have no problems.
Sounds like your pm is trying to get the best applicants rather than any. I'm not sure what was wrong with the first application? Why hadn't they rented before? Just left home, home owners or new immigrants?

 

Personally if I would get a bit worried about not finding a tenant after 2 and a half weeks, I would have just taken that first application with the 3 adults.

 

Dear The Goat,
prospective tenants would be having a look at 'what else' is for rent.
Is your townhouse the same price as the others?
Is it a bit more expensive?
Is it a bit cheaper?
You might want to have some point of difference that offers better value in some way, so you can attract the profile of tenant you are looking for?
I hope this helps,
cheers

 

Hi @thegoat

The pics all look fine to me and the amenities are well-described in the ad.

In a low vacancy rate environment I'd be wondering what's wrong. Have a friend pretend to be a prospective tenant and call to enquire about it. You want to check that people are actually managing to speak to the property manager, not getting blocked by reception with messages not getting passed on (or messages getting passed on and letting agent not returning the call). It just takes one problem person at the agency for the system to fall down.

I also attend some of my rental opens dressed very casual so the renters think I'm a prospective tenant. I listen to what they say in each room. I might be thinking a blind is a bit yuk and in need of replacement but instead hear tenants say how wonderful it is there is so much storage space. If you can hear tenant feedback first-hand you might determine what the issue is. It could be as simple as people wishing there was a split system other than just evaporative cooling.

Hope this helps.

 

ps not sure if there is a dishwasher as it is not mentioned or pictured. If there is one, get the agent to mention it in the ad and also add in another picture clearly showing the presence of a dishwasher. I'd also mention in the text that it is walking distance to the primary school. I also note there is no pic of the backyard or courtyard. I'd be adding in a pic of the outdoor space for sure.

 

They hadn't rented before because they were relatively new to the country. I assume they had been staying with friends/family before applying. Although she said they were well presented and everything checked out ok, she recommended at least another open (which is where I'm at right now). I suppose I'll see if any applications have come in and then talk to her about these people again.

To be honest there aren't a lot of townhouses in the area. Another one available right now is going for $430 with a double garage, but from looking at it I think ours is better presented.

At the moment I'm guided a lot by her recommendations. Trying not to stress but being a first time landlord I'm just worried that it's taking a bit too long. I think I'm worried mostly by just the low number of actual applications.

 

What feedback did the property manager provide from those 20 people that inspected? You should know the reason as to why they did not apply.

Perhaps the property manager didn't follow up with the prospective tenants afterwards.

You can test how proactive the property manager is to leasing your propery by sending an enquiry from the listing page. (Use a different name and email address)
This will give you an idea how much effort they put in and their response time.

 

[QUOTE="thegoat, Trying not to stress but being a first time landlord I'm just worried that it's taking a bit too long. I think I'm worried mostly by just the low number of actual applications.[/QUOTE]

Lol it's awesome your stressing already, in time you will tuffin up. Just wait till your tenants start paying late, skip without telling you, trash your awesome paint job with tv brackets installed into the walls and pictures, kids paining on walls and drawings. Cut into your kitchen bench tops, burn your curtains, let cats pee inside, punch holes into plaster, steel your internal doors. Calls from the manager asking to attend jobs that need fixing all the freakin time.
haha it's exciting at the start, enjoy it.

Please get good insurance. I recomend terry scheer. Do it, do it now.
Now.

 

Goat it's a common problem sometimes when 20 people view a property. Tenants think that they have no chance, too many people interested and they do nothing.

Like Nick said, following up can make a difference. I follow up the ones I liked.

If it's priced within market range it should not take that long - around 2 weeks is normal (depending on property and circumstances).

From what you are saying, I don't think a price drop is warranted. We recommend dropping the price if there are no enquiries, in your case the enquiries are there. Your issue is possibly tenant apathy "why bother, I have no chance" get your pm to follow up and either encourage them to put in an application form or get some feedback on why they are not going to.

You need to know what the problem is before you take action against it.

 

Yeah, they should have some feedback from the people.
But I wouldn't be stressing - yet.

 

Hi all, thanks for all the feedback so far.

I had a chat with my pm today and she has followed up on those that took application forms. The general feedback was that although the property was really nice, they had found properties a bit larger in the same price range in neighbouring suburbs. She said one person she spoke to was going to apply and there is another open for inspection tomorrow.

So obviously people think the rent is slightly too high. I've told her that I would like to wait to see if the person she spoke to actually does apply and also to see who comes through the open tomorrow. At that point it will have been around 3.5 weeks since it was first advertised. If nothing comes in and no one seems interested tomorrow I'll probably drop the asking price.

My question is, is it better to drop it by say $20 to get interest going, or better to drop it by say $10 for now? My concern is that by dropping it only $10 it's not enough to spark more interest and it'll end up being another few weeks before someone applies. I also assume the longer it is on the market the less people are interested.

Any advice?

 

We always look at comparable rents in the area and then beat it by $10 or $20 (e.g. $400 we would advertised at $390, $600 we would advertise at $580).

After the lease expires (preferably 6 months) we try to raise the rent the extra $10 or $20.

In our experience keeping it lower than the competition can mean more applications so more chance of finding a quality tenant.

Compare the cost per annum of:
A) The cost of having the property vacant X amount of weeks
-vs-
B) Dropping the rent by $X per week and getting a tenant within a week or two.

 

Find out how much bigger the other property was and how much the price difference was.

Removing ad for 24 hours after next inspection, dropping by $20, relisting and doing a feature ad will get the property to "new" again.

 

Currently in a similar situation.. Had over 50 people (apparently) come through 2 opens and only 4 applications, 2 were incomplete and the other 2 are not great either.. Stressful times, but not as stressful as having a non paying tennant

 

Excellent advice! Experienced investors know this in addition to the fact that it depends on the market at the moment - in an oversupplied market it will take longer as tenants have more choice - in an undersupplied scarce market we get twenty applications within 24 hours - market factors at play and what a good PM can do is offer immediate responses to inquiries by offering inspections by private appointment at a time that works for the applicant's busy schedule

 

Just to let everyone know we finally got a successful application yesterday. References came back very good, and they will be moving in on 20th Feb.

Thanks everyone for the advice. I can see how valuable this forum is going to be on my investing journey!