Are you checking your competition?

I was driving by one of our rentals last week and caught a For Rent sign in the yard with an open house sign next to it. I like this strategy when you are making final tweaks to a property and you are going to be there all day — Go ahead and put an Open House sign next to your Rental sign. As most of my vacancies are filled via my sign in the yard, this is a good way get tenants to view your property, get some apps filled out and get some feedback on the house.

Technically, other rentals in your neighborhood are only competition if they are vacant at the same time yours is. Nevertheless, any time you get a chance to tour another rental – DO IT. This is your best way to comp your property. You can check the MLS and various other websites, but current rentals in your neighborhood is your best comp. This is also a good opportunity to talk to another landlord. Ask about their application process, income qualifications, late charges, move in policy, pet policy, etc. I want to understand what my competition is doing and I always seem to learn something useful in the process. It is interesting to “put the shoe on the other foot” and understand what your prospects are going through as they are viewing your property.

This particular property was in terrible shape. No fence in the backyard was a big problem in my mind. It had a 2 car garage in which they had built out one half and left the other. The build out had wood paneling, a low drop down ceiling, very dark, bad AC vents, etc. They forced a closet in one corner, so they justified it as a bedroom.

The bathrooms were nasty, the house needed paint, spots on ceilings, spots on the carpets, missing light fixtures, leak spots under the sinks, missing door hardware, damaged doors, etc. It was an all-around rough property. They were asking less than market rent, but not a lot less. Another interesting thing to watch is how long that sign is in the yard at the given rent rate.

I also take the opportunity to find out what other homes they have in the area. I will take note of which properties in my neighborhood are rentals and also try to keep track of who the owners are. These could turn out to be good leads on future purchases.

Anyone else do this sort of window shopping in your farm areas?