I'll just start by saying, you really can't expect IMMEDIATE results. And that doesn't just apply to real estate investing, or marketing a property for rent...that just applies to life in general. There's your words of wisdom for the day :)
But, back to getting my property rented.
So, at the end of March, I took a little risk, and listed my property at $1,050 in hopes of getting $50 more per month than I was anticipating.
Long story short, that experiment didn't work out. Yes, I got a couple applicants, but they ended up not qualifying to rent the place according to my Property Manager's standards. At one point, I had another strong lead, but they had a dog...and going into this whole landlord business, I've always been opposed to having pets in my properties. I have nothing against animals, I just fear the worst sometimes and foresee urine stained carpets and wrecked walls. I'd like to avoid that and protect my investments.
A couple weeks go by, and I decided to drop the rent from $1,050 to $995 (my property manager felt keeping it under $1,000 would attract more renters). Kinda sucked that my decision to start with a higher rent didn't work out...but that's life.
A couple MORE weeks go by. OK, now things are getting a little worrisome. Doubt creeps into your head. It definitely crept into mine. Here we go again...should I have even bought this property in the first place? Is real estate really a great investment?? I ran through all the scenarios and plugged lower rents into my spreadsheets. What would my return be on the property if rented at $850? What about $800? Worst case scenario would be $750, right? RIGHT??
Remember, I live in the San Francisco Bay Area where properties literally go on the market in the morning and are rented by the evening. I've been trained to expect a highly competitive rental market.
Indianapolis is not San Francisco.
Today, April 27th. I GOT A SIGNED LEASE!
It took some time. It took a lot of personal patience. But, at the end of the day. I got a signed lease.
There's still a slight bummer...the tenants aren't moving in until May 22nd...so there's still some time until I start getting payments. I'll end up having to pay my first mortgage payment on May 1st without a renter, but that's why you have reserves.
Bottom line: this property is very close to becoming a performing asset. And at the end of the day, that's all that matters.
-Listing your rent at the appropriate price is very important. I'm not upset for trying to list a little higher than expected...it ultimately cost me a couple weeks...but I felt it was worth the risk. However, if you are tight for cash and need the income immediately, I wouldn't recommend taking the risk. Consult with your property manager. They're the experts.
-Patience! If you live in a competitive rental market and you invest in the midwest/out-of-state, you must recognize properties sit on the market longer. It's just the nature of it. Have reserves in place to cover vacancy and practice patience.
Next up: time to start getting cash flow!