A.D. Cantelmo Property Management
Our Business is Property Management in Orange County California
The Stress of a Vacant Property?
As an Investment Property Owner, having a Vacant Property can be a very stressful time. As a Broker/Owner of a Property Management Company in Orange County Ca. I deal with vacancies all the time. I tell my clients that renting a property is not that much different then selling a property. In order to effectively and efficiently rent a property you need to get as many people possible to see the property who are looking for the type of property you are offering at the price you want. How do you do that?
Pricing your Property
First, the most important step is to make sure you are not over priced. Now, that does not mean that you should not try and get as much for your property as possible. Just the opposite, I feel that the best time to push the envelope in regards to increasing the rent is when you are looking for a new Tenant. Before you price your property, you need to evaluate your financial situation. In order for you to increase your rent, it may mean that your property will be on the market for a longer period of time. Ask yourself one big question. Can you deal with the stress of a prolonged period of Vacancy?
Timing is Everything:
In my business of Property Management. I find The best case scenario is putting your rental property on the market while you still have a Tenant paying rent. In most cases you will receive a 30 day notice. Now this is the time you can push the price increase without taking a financial hit For the property Owner. Once you get your 30 day notice you should put your property on the market a the rental price you would like to receive. For example: If your current rent is $2000 and that rent is comparable to rents in the area, but you feel your property is worth $2100, as soon as you know your current Tenant is going to move, market the property at $2100. You can see what kind of interest you receive from potential renters at the higher price. If after the first week you receive little or no interest, you can take from that response that your property is probably over priced. At this point you still have 3 weeks of a Tenant in the property so you have lost nothing except one week. Now you may want to drop the price to $2050. Again after a week you will be able to see what the response is. If you have good response you know you may be able to get the higher rent. If again little or no response, then your property was probable price correct at the $2000. The way you market and the timetable you use to increase or decrease the marketing price will depend on the Property Owners tolerance of a vacancy.
Marketing on Social Media:
These days of Social Media, it is easier then ever to get your property information out to prospective renters. As a Property Management Company we take advantage of all the web sites out there that cater to people looking to rent. We always put our properties on the "MLS" (Multiple Listing Service). I mention the "MLS" because It is one of the best tools that a Realtor has to get a property rented Efficiently and Effectively. I want to elaborate on the use of the "MLS".
Using the Multiple Listing Service:
As Realtors we pay to use the Multiple Listing Service. It give us access to search properties, and in our case the "MLS" lets us market our properties that we manage to thousands of Realtors who may have clients looking to rent. Once we put our properties on the "MLS" those properties go out to many other Web sites including Realtor.com. Our goal is to get your property rented as quickly as possible to Tenants that are well qualified. The "MLS" is a great tool. In my opinion many companies do not use the "MLS" to their clients advantage.
Missing the Mark on the "MLS"
Why do so many Realtors miss the mark when they use the "MLS" when it comes to Leasing properties. Well it all comes down to money. For example: When a Realtor lists a property to sell they offer a commission to other Realtor's. On average the Commission is around 2.5 % of the sales price. Now Commissions are not set, and when you sign your listing agreement you and your Realtor agree to a total Commission you as a property owner will pay to sell your property. Your Realtor understands that the higher the Commission he offers other Realtor's on the "MLS" the more interest he will get from Realtor's to show their properties. When you sell a property for, lets say $500,000, a 2.5 % commission is a very nice payday of $12,500. So if a listing agent splits a 5% commission he does not mind splitting that commission with another agent who brought the new home buyer. But, when it comes to renting, it is a whole different story. The average commission for renting a property for a Management Company is 1/2 of one months rent. If the rent for a property is $2,000 the the total commission is $1000. Not a big pay day. If the listing agent, or Management Company has to split that $1000 commission, they end up with a $500 payday. Here is where I feel that many Management Companies miss the mark. They offer a very small commission for other Realtor's to show their properties. When you look at the "MLS" you will see many commissions at $100. Now that does not create much incentive for other agents to show your rental property, and quite frankly they don't.
Why do Management Companies offer low Commissions?
The question as to why many Management Companies offer low commissions for their rental properties on the "MLS" is a very easy one to answer. They don't want to split the commission paid by the Property Owner. This is understandable from the companies point of view, but a big problem when it comes to taking care of your client. When a Property Owner hires a Property Management Company to manage their property, they feel that the Management Company will do everything they can to take care of the property and also deal with vacancies with the Property Owners financial well being in mind. If a Management Company's strategy is to offer a low commission on the "MLS" to only use the "MLS" as a gateway to other web sites and not to incentivize other Realtor's to show the property, they should disclose this strategy to their client (The Property Owner).
A.D. Cantelmo Property Management Specializes in Property
Management on Orange County Ca.