“Never mistake activity for achievement.”
John Wooden (legendary UCLA basketball coach)
A popular maxim says that if you want to be wealthy, keep things old:
- Old Car
- Old House
- Old Wife
When you get things right the first time, it saves a lot of money! I’d also add “Old Tenant” to the list…
It’s also been said that “practice makes perfect.” Athletic gurus (originally attributed to Green Bay Packers coach, Vince Lombardi) have amended that to “perfect practice makes perfect.” The reasoning is that if poor technique is being practiced, more practice could potentially make one worse.
The same can be said of turning homes for rent (I’d say selling them too, but it seems like if your house was on fire in Charlotte, it would still receive multiple offers).
It makes sense that the longer a rental home is on the market, the better the chance is that it will rent. More potential exposure equals more showings which would equal more applications and a quicker turn between tenants. More time on the market (practice) automatically equates to better results (perfect). But I don’t think that the market always bears this out.
So having a home on the market for rent for a longer time can be sub-optimal? Why?
Most of the time, to increase the days on market, the days are taken from when the rental home is tenant-occupied or while it is vacant and repairs are being completed. This is usually when the house is not in optimal condition. So rental ads are urging people to see a home that isn’t in great shape.
This matters for several reasons:
- Great tenants care about the condition of the house. They are very interested in their living environment and value well-kept domiciles. These types of tenants typically return the home in as good or better shape than when they moved in. We really like these meticulous tenants! They usually pay before the 1st of the month too.
- The manner in which the internet home search game works warrants putting out the best product first. Prospective tenants typically set up search parameters and are alerted when rental homes come to market that fit their profile. So when a home is initially put on the market, this should precipitate the biggest surge of showings. If the home is hard to get into (tenant-occupied) and/or looks disgusting (being cleaned and repaired), they will visit and pass on the unit. Or the wrong type of tenants who aren’t bothered by the poor condition will put an application in.
- Homes on the market for a long time tend to get stale. People wonder what is wrong with the house when it keeps coming up in searches for months and hasn’t been snapped up.
A caveat to this: I don’t have a big issue going to market while a home is tenant-occupied (this does not factor in COVID considerations). If the tenant that is there is cooperative with showings, it is essentially free time to market the house. It’s a great feeling to approve a tenant during this time and time their move-in a week after the current tenant vacates (allowing time to get the home in shape for a new occupant). But #1 above can still apply if the home is in poor shape.
In short, for optimal results, wait until the house is fixed up and at its best, then go to market. Get the rental house right the first time and practice perfectly!
Happy Landlording!
Posts
