Death By Vacancy
Hi Everyone,
As George Clooney would say "we're in a tight spot".
We closed on 3 duplexes in a gated community March 1. Closely studied all documentation during option, rent rolls were impressive. 100% occupancy at $995/month, when one tenant vacated another was moved in by the next month.
Within a month of close we inherited three vacancies and cannot get any takers. All drive by caller volume indicates interest in $750 range. Ads bring no results.
Today found out DCAD has raised our taxes $80/month. (not based on our purchase, property is still listed in seller's name)
Curiously, seller has now changed his number and so has the manager listed to find his tenants.
What else can we do to find tenants? Any advice would be most appreciated.
Thanks
Offer them big screen TV's if they will sign a three year lease.
I had a vacancy that was hard to fill a couple months ago...
I advertised "Half off First Month's rent" and then went on to explain the apartment a little bit - I had many many people come the week of that ad getting published...
Good Luck!
[addsig]
Have you taken the time to investigate your competion? What are other landlords in the area charging for rent, and how do their properties compare to yours?
The properties are clearly inferior and are asking for less rent. All the drive by calls we're getting ask about the lower amount. We're asking 995, all calls are interested in paying 775. Suggestions?
I've got a gripe with some of the information that you're telling us. You say that it has a "100% occupancy rate" AND that a vacancy took 1 month to fill. That alone makes it about 92% occupancy, not 100%.
What are the market rents and how did you arrive at that number??? Are you using the market rents that the seller told you? You may be asking too much for your area/property.
To clarify: the properties were marketed at 100% occupied which they were up to the day before closing. We lost one then. In the month that followed we lost two more.
When the seller owned the property: when one tenant gave notice and left, the seller had that position filled by the very next month.
Determining rent amount: When we bought these 6 units, they were all rented at $995 across the board. Seems like a strong case for determining going rent.
However, we can't get ANY interest even at 915. Everyone who calls is interested in the 775 range.
We can't figure out how or from where the seller found his tenants, and now he's conveniently changed his number.
We don't know how to find the people who can afford 995 or even 915.
Before you purchased, did you survey the tenants and ask how much rent they were paying.
Sounds to me like you got ripped off by seeing inflated rent figures.
BOB FORD[ Edited by DaveT on Date 05/09/2004 ]
We did meet with the tenants, didn't specifically ask them what rent they were paying. However we received copies of all leases specifying the rents at $995. To me that was proof enough...maybe not huh?
I am sorry to say, but you have probably been had. I would hire an attorney and maybe even a private detective. A classic fraud in the rental business is to inflate rental rates and occupancy rates by offering incentives under the table to tenants. Who knows, maybe the landlord had a private agreement with the tenants to pay $300 on their VISA bill if they would accept a rent of $995/month. There are a million and one different ways to hide this kind of abuse, and believe me, it is very, very, common although not always to the degree you are talking about. If a lawyer can't get anything on these guys, you will just have to accept it as a very expensive lesson. You can either lower the rent and feed the tiger, or sell and take a several thousand dollar loss. In the future, always check out the going rate for similar properties in a comparable neighborhood and then don't buy unless you can lower the rents by 10% below the competition and still come out ahead.
Hoping it turns out well,
Dave