Tenancy Tip Thursday - Christmas period letting

Can you believe another year is about to roll around?

As we approach the Christmas period, this is traditionally the slowest time of the year for the rental market. Quite often, if people can help it, they'll put off moving this time of year as there's so much else going on in other facets of their lives.

So, if you want your property let before Christmas, and not sitting empty til the new year:

- Firstly, make sure your properties are very sharply priced. This is not what some investors, especially the stubborn ones, want to hear. Do the sums on leasing now versus in the new year at different numbers and see how much it affects the annual gross revenue of your investment. You can always bump it up down the road.

- When you do sign a tenant up, try to do an odd duration lease eg 9 months, 15 months etc, so that you're not in this same predicament again this time next year. Offer 12 month renewals after that if the tenants want to stay; just a matter of aligning the timing to suit your area.

- If you're about to have a new property settle or an existing lease end, ensure you're already marketing the property so that you can line someone up immediately following.

- Ensure your PM is using InspectRealEstate. This is software that takes inquiries from tenants 24 hrs a day and books them in a time slot of their choosing to view the house. At all times, but this time of year especially, you can't let any inquiries slip through the cracks. Get them all along to see the house! This software will also send them a link to the application after they've seen it as well. Definitely want to ensure you're capturing all the interest in the property and not letting any slide.

- Also using the above, when tenants have booked they provide their email / phone number for the database. Ensure other properties that are available are being sent out to that database, as chances are if they're in the market for a new place, that new one might suit them.

- If all else fails, perhaps use the period to do some improvements to the home - (painting and floor coverings work a lot of magic!) and then let in the new year when the tenants are back out in force.

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Have place settling on the 2nd Dec but fortunately my managing agent has commenced with the advertisement and etc.

 

Cant believe another year has rolled around again!

How many of you have leases coming up this December? You should be in contact with your PM's to ensure an odd duration lease (or renewal) is done so that you're not stuck in the same predicament again next time around.

Alternatively, it can be a good time to get some improvements happening at the property, ready to rent it out in the peak period (start of the year in most major cities).

 

Was fortunate to get good tenants in last Deceumbeer.
But I rolled mine over last time for 14 months, they're due in Feb and already resigned for another 12months.

 

Well played

 

Haha Deceumbeer... just noticed that.

Actually wanted $20p/w extra but will take the $10p/w considering tenants have been awesome and it's x2

 

Great set of recommendations, particularly the one about sharp rent- many clients struggle to bring themselves to reduce the rent even though they can clearly see the loss if it's left vacant until January. I can't stress enough how important this is when there's such a limited tenant pool in December.

 

Looks like the final handover for our new builds is about 20th Dec.

Not much we can do really. Will probably sit on them for 2-3weeks before marketing

Hard to market now before they are ready for pretty pictures.

Blacky

 

Holding off is a good idea, on account of the time of the year (immediately prior to Xmas) and also without photos. I recommend listing them in the first week of January, Friday 5th around lunchtime would be absolutely perfect. Advertising too early over Christmas will just leave your ad at the end of the list when the flood of January listings hits the market and people start looking. It's the ONLY time of the year I'd ever recommend holding off.

The small silver lining is that it gives you plenty of time to water the lawns in and get perfect professional photos.

 

Just this week I had a tenant break a lease (re-signed only a weeks ago) with "I moved out today, keys are on the counter" email to the PM. Thankfully they left the place in good order.

Unfortunately for them, now they get to experience an insurance company chasing them down to recover a claim for lost rent payout.

 

So you don't have to take them to tribunal yourself, the insurance company just takes up handling it from the very start?

 

That's right. Isn't it a dream come true.

 

I'm struggling to get my brother's place rented at this time of year

In my opinion it is priced well in comparison to others, its about $30 more but its properly renovated compared to a run down place.

The main reason I see is that my brother was greedy and wanted it listed at $660 (mid Nov) and as a result no one came. Now that its down to $660 (two price drops), more groups are coming, but i think it's been a costly exercise. Had he listed it at $600 from the beginning, more groups would have arrived at once, creating a greater sense of urgency and competition among potential candidates.

Right now, we have one application, and its one I advised my brother to pass on and let it stay vacant than to rent to these people.

 

You're spot on- that sounds like exactly what's happened. As a general rule, enquiry drops off steeply after two weeks of listing. If you haven't got the property positioned properly (i.e. price) and advertised at its best within those two weeks, your prospects go south fast. Critically important to get it right from the start, or at least within the first few days. It also doesn't help that we're now in December competing with many other properties for few tenants.

Where is it on the rental list, and are there professional photos? If they spend a bit of money upgrading it to a highlight or premiere, it will throw it right back up the top of the list which will make a HUGE difference to enquiry.

 

Not many people like the added expense of moving around Christmas time. I've never had any luck in renting with in a few weeks of Christmas, it always picks up around late January when people are back at work.

 

Its constantly on the top. Professional photos done (I wouldn't do it any other way).
Inquiries are coming in... just from the people we don't want.

My brother wants to drop the rent again to $550, but I'm against it. Its dropped from $660 > $620 > $600.

My view is that dropping it that much will only attract the not so great tenants from here on in. Its Christmas. The good tenants don't want to move because they've already got their living arrangement affairs in order and are focused on enjoying the festive season. Also any good tenants who have been monitoring the rental market would see this place has dropped several times and would start to wonder "whats wrong with it".

At this point, I'm inclined to take it off the market and relist it in mid Jan. Thoughts?

 

Agree wholeheartedly with the rest of your post. I guess the issue with the bit highlighted is you miss out on a months rent - may as well be trying to lease, you never know when the perfect tenant could come along. Unless you're planning on doing some work to the property?

 

Agreed. The perfect tenant could come along.

I was more thinking when the agency is closed for xmas > new year break.
I think they are closed from 23 Dec and reopening on 8 Jan.
Therefore this Sat is actually the last Sat open for the remainder of the year and the 13th Jan will be the first Sat.

So if the ad comes off on 21 Dec, and reappears on 11th Jan, it will look "fresh" - or am i just over thinking it?

The place is already renovated. All reno works should have been completed in 6 weeks, instead it blew out to 12 weeks - there was nothing out of the ordinary, but my brother had other competing priorities.

 

Over thinking it I think. Shot himself in the foot by taking so long though - could have gone to market before the slow down.

We have quite a few listings up so won't be closing the office this year; working straight through.

 

I think in event that the agency is closing anyway, you may as well drop and re-list. It will definitely make it look fresh for the new year.

I wish I could close for over two weeks... Like Dave, will be working straight though! Busy December!