Rent Price Decreases

[terri]

QUOTE (JeffFisher @ Nov 29 2008, 12:07 PM) Interestingly discussion. My partner and I have just purchased our first property that closes early in January. It`s our first investment property (a townhouse in N.E. Edmonton). Asking rent in other properties in development are $1150 per month and $1195 per month quite a bit lower than rentometer.ca would suggest!


You can`t base market rent soley on "rentometer". It`s a guideline, but not a very accurate one because it only represents the rent of those that have taken the time to go on there and list it. Landlords using rentometer are probably a bit more savvy than your average landlord, so it`s quite possible that the #`s are scued a little higher than average. As well, when using rentometer as a guide it can`t distinguish for you the condition of the property and last time I checked it didn`t seperate basement from above grade apts either. The best way to really know what your property can get in rent is to go out there and see what`s out there. Look at other apts in person. Look online at what`s being rented, you can get a good idea from pics how it compares. If you can`t do the due diligence yourself then make sure that you hire an excellent property manager that you trust.

T.

 

[Thomas Beyer]

QUOTE (terri @ Nov 30 2008, 11:32 AM) You can`t base market rent soley on "rentometer". It`s a guideline, but not a very accurate one because ...

How much is an average car ?

from $1200 to $150,000 .. depending on age, quality of engine, mileage, quality of leather, # of doors, ... same with houses/apartments !

Do a detailed analysis on your very SPECIFIC property in a SPECIFIC neighborhood ! If on closing day you are unsure of rent levels you have not done enough homework / due diligence !!

 

[LeighF]

QUOTE (mortgageman @ Nov 30 2008, 12:10 AM)
Don't bother waiting a couple of weeks. Just delete, rework it and get it back up there. Repeat over and over until it's rented.

Good luck!




I AGREE!

 

[GarthChapman]

QUOTE (thomasbeyer2000 @ Nov 30 2008, 01:01 PM)
How much is an average car ?



from $1200 to $150,000 .. depending on age, quality of engine, mileage, quality of leather, # of doors, ... same with houses/apartments !



Do a detailed analysis on your very SPECIFIC property in a SPECIFIC neighborhood ! If on closing day you are unsure of rent levels you have not done enough homework / due diligence !!




How prices have escalated! My first car cost me $35.

 

[JeffFisher]

QUOTE (thomasbeyer2000 @ Nov 30 2008, 12:01 PM)
How much is an average car ?



from $1200 to $150,000 .. depending on age, quality of engine, mileage, quality of leather, # of doors, ... same with houses/apartments !



Do a detailed analysis on your very SPECIFIC property in a SPECIFIC neighborhood ! If on closing day you are unsure of rent levels you have not done enough homework / due diligence !!






Thanks for all of your replies Thomas. We know that townhouse will be rentable at the lower end of what we had anticipated. We do now have a highly recommended property manager (by 2 other REIN members). While we haven't done our homework (we now know) to the degree that we should have, it appears that the property will cash flow and we have an effective property manager.



We were lucky this time and we know what we won't do next time.



Thanks for your suggestions and - more importantly - your warnings.



Regards,





Jeffrey Fisher

 

[lwelke]

Being the initiator of this topic (who`d`ve thunk it was going to get the response it did!), I thought I`d let everyone know what the results have been for me since the initial posting.

Being given notice on November 3 from the previous tenants, I put out my ads on-line and posted a "For Rent" sign on the front window. I kept the rental price at $1350, which is what the previous tenants were paying (they only lived there since June of this year, which is when the property was purchased). Over the next couple weeks, I only showed it about 5 times and didn`t get very many other calls. After asking each prospective tenant what the comparisons were between my property and the others they`d been looking at, they ALL said that the other properties were renting for $850-$1100/mo, most of them being larger in square footage. Mine is a recently renovated, 820 sf, 2 bedroom, 1 bath main floor house in Capitol Hill, Calgary. Only downsides are that it sits on a very busy street and the exterior of the house needs some work.

Anyway, after two weeks of not renting it, and considering the feedback I was getting, I began decreasing my rent until finally, during the last week of November at a price of $1100, I began getting many, many phone calls, but they all wanted the property for Jan.1. I ended up with two sets of prospects "fighting" over the property. They both wanted it for January 1st, but I wanted it rented for Dec.1. They each offered to pay half of December`s rent in order to secure it. So I gave it to the two girls who were the first to give me their application (both sets of girls had excellent references). In addition, because my previous tenants who moved out only gave notice on Nov.3 (rather than the 1st), I kept a $300 re-rental fee from them (as stated in my lease), so in the end, I only had to cover about $250 for December`s rent, and the property will only remain vacant for 2 weeks.

However, because I had to lower my rent by $250, I`m taking quite a hit to the cashflow. Thank goodness one of my other properties will cover what I`m losing on this one. I can only hope that I`ll be able to increase the rent at some point next year...

I don`t think I would have received my original asking price of $1350 for the property even if I had held out for two or three months. Or perhaps I would have, but I just got scared. Anyone else in Calgary going through the same thing? Most posts on here seem to be from Ontario with a few in Edmonton...

Leanne Welke

 

[CFK]

You could try advertising at Safeway. Its free as well and think of who is shoping at Safeway! Also use words that catch peoples attention and pictures! You got to work hard and sell the product! Dont give up!

 

[Brigham]

Yes there is a drop in rental property and it is difficult to ask for some increment because the nearer property rent are decreasing day by day.I have commercial property and it is really good for me but still no increase in rent this year start .

 

[Thomas Beyer]

[quote user=lwelke]... I kept the rental price at $1350, ...they ALL said that the other properties were renting for $850-$1100/mo, ... Mine is a recently renovated, 820 sf, 2 bedroom, 1 bath main floor house in Capitol Hill, Calgary. Only downsides are that it sits on a very busy street and the exterior of the house needs some work.

..





Anything over $1/sq ft is high and assume pristine property condition and an excellent location .. although we are seeing rents starting to INCREASE .. albeit tepidly across Alberta after 3 years of a slight drop !

 

[bizaro86]

[quote user=CFK]Its free as well and think of who is shoping at Safeway!



What demographic group do you think is more likely to shop at Safeway?

 

[Scott Lyall]

I finally was able to put through 8 % increases on 3 properties in Sh. Park and NE Edmonton after 3 years of same to dropped rental prices. Looking at comparables it seemed to me that rents were going up .

 

[Thomas Beyer]

[quote user=Scott Lyall]I finally was able to put through 8 % increases on 3 properties in Sh. Park and NE Edmonton after 3 years of same to dropped rental prices. Looking at comparables it seemed to me that rents were going up .


same experience for our AB based properties in the Edmonton region and Calgary ..