Rent Price Decreases

[RebeccaBryan]

QUOTE (thomasbeyer2000 @ Nov 10 2008, 12:59 PM) A picture says more than a 1000 words .. and your pictures are not inviting (to be polite) .. except the LR picture !

4 comments

a) kitchen looks "cheap" .. cheap knobs, single (not double) sink, cheap countertop .. any mother will say "next" .. hence price is WAY too high - do you have a better picture or change the kitchen knobs at least and new countertop !!

b) no picture of house .. how come .. is it ugly ? just the primitive garage .. add a house picture from front .. flowers in full bloom .. !

c) bedrooms must be very small .. hence adjust rents accordingly

d) rents sounds WAY too expensive for a 1250 sq ft home .. $1800 .. + utilities .. no wonder you are having problems renting .. how about $1/ft to $1.20/ ft (TOPS !! for an excellent house only) or $1250 to $1400 ??

I disagree with you on this one Thomas. It clearly needs more pictures, but the ones posted look fine to me. I think he`s dead on with his price of $1800. I rent just the main floor of two 60`s bungalows, one for $1675 including utilties and one for $1575 including utilites. The basements are rented for $1200 incl. util and $1050 incl util. respectively. That easily clears $2000/mo for the whole house. The fact that it`s the whole house accounts for something. I agree with you about the single sink, but if there`s a dishwasher that shouldn`t be a problem. I rent the main floor of a duplex that was built in the 60`s. It`s just an average suite, and I`m getting $1375 plus utilies. The properties I am renting are in Killarney, Delwood and Dunluce.

$1250 to $1400 is WAY too low!!! Stick to your $1800 and get some signs out there on the street!! You`ll get dozens of calls. Since it`s a house for rent, make sure your sign says that. I had dozens of calls recently of people looking for whole houses and they were willing to pay $1800 in most cases.

 

[DineenJJ]

Thank you Thomas and Rebecca for your opinions. I will be changing the pictures (adding a picture of the front) and also putting up signs. Unfortunately I could not put in a double sink without knocking out all of the bottom cupboards because the sink would not fit.

Anyhow, thanks for the feedback.

Dineen

 

[MikeMcCrae]

Ah, the day has come. I have finally found an opportunity to disagree with Thomas. I get $1400 for a 2 bedroom 800 sq/ft 1940"s built house, and $1600-2050 for 1200 sq/ft. Please do not rent a 1250 sq/ft house for that little. We need to get rents to catch up to todays value not drop rents to 4 year ago values. I was getting $1250 for 1050 sq ft houses when they were worth $175,000.

 

[TerryKruse]

We recently rented an upper suite of a home in Calgary (1440 square ft) for $1595 plus utilities and the garage was extra. We had it rented in just a few days without a problem.

Having a large FOR RENT sign outside only got calls from people that couldn`t afford the rent. The best calls we received were from Rentfaster.ca.

We did get a lot of calls from the sign though. I put 2 signs I bought at RONA back to back, inserted our phone number and attached a frame to them.

Cheers, Terry

 

[Nicola]

QUOTE (MikeMcCrae @ Nov 11 2008, 10:04 AM) Ah, the day has come. I have finally found an opportunity to disagree with Thomas. I get $1400 for a 2 bedroom 800 sq/ft 1940"s built house, and $1600-2050 for 1200 sq/ft. Please do not rent a 1250 sq/ft house for that little. We need to get rents to catch up to todays value not drop rents to 4 year ago values. I was getting $1250 for 1050 sq ft houses when they were worth $175,000.


Yes, we don`t really want to encourage a race to the bottom... I would still like to have some cash flow...

 

[Jack]

QUOTE Just pump up your advertising!!!! Put some effort into marketing and you will get the places rented for what you want!!

Don`t buy into the doom and gloom!

You think the doom and gloom is a media creation?

Wages are growing at a slower pace than inflation, major projects have been stalled, workers are being laid off, less workers are being hired, less jobs are being created...it`s not 2006 anymore! The downturn is very real, and the scary thing is that the economy hasn`t really been hit that hard yet here locally, speficially unemployment. But it`s happening, and it`ll almost definitely get worse. As for rents, I`d say that they have come down relative to 2007, but that`s just based on market observation and not facts.

It`s great to think positive, but come on...

 

[selansa]

QUOTE (EdRenkema @ Nov 9 2008, 04:11 PM) Well I`m not buying into the doom and gloom but I`m having a lot of trouble getting any action on my third purchase since joining REIN. It is totally renovated, I`ve advertised since last week of September, now on 3 sites: kijiji, gottarent, craigslist, was on viewit.ca and my realtor listed it on Royal Lepage. I`m $25 below market rent (I`ve got another in the same complex) I`m offering a $100 Xmas gift certificate and a free DVD player with one year lease. Last week I walked the neighbourhood and put out 150 flyers offering $100 to anyone who brings me a tenant that leases for 1 yr. One call this week, one call last week - just tire kickers, here is the kijiji ad:
http://hamilton.kijiji.ca/c-ViewAd?AdId=86...70-0e80ffff794b
What else can I do?
Any suggestions?
Getting the word out that your place is for rent is your first option. I have a free web site called www.HomesForRentCalgary.ca. You may also want to try that. Also, if you show the property ask for feedback. If they do not rent from you it would be best to ask them why they didn`t rent yours over another. It is possible for the market rent to change. Right now we have an overwhelming amount of empty properties in Calgary and many owners are deciding to rent them out. This could easily effect the market rents.

 

[Jack]

QUOTE here is the kijiji ad:
http://hamilton.kijiji.ca/c-ViewAd?AdId=86...70-0e80ffff794b
What else can I do?
Any suggestions?

You`re totally overselling the unit. More vague, less cheese. "Bring your white gloves"..."WOW"...

Try going simple, suggesting a responsible unit for a responsible price. Get people on the phone and talk to them. Nobody`s going to rent from you because you`ve said that it`s clean on Kijiji. Be quick on your feet, establish a relationship on the phone.

Remember - people are already at Kijiji, looking for rentals, so they`ve already been sold on the idea that they need to find a place to rent. And there`s an old saying in business - don`t sell what`s already sold. Make your ad vague, get people on the phone, and make yourself a new friend!

 

[Thomas Beyer]

QUOTE (Jack @ Nov 10 2008, 07:14 PM)
You think the doom and gloom is a media creation?



Wages are growing at a slower pace than inflation, major projects have been stalled, workers are being laid off, less workers are being hired, less jobs are being created...it's not 2006 anymore! The downturn is very real, and the scary thing is that the economy hasn't really been hit that hard yet here locally, speficially unemployment. But it's happening, and it'll almost definitely get worse. As for rents, I'd say that they have come down relative to 2007, but that's just based on market observation and not facts.



It's great to think positive, but come on...


Indeed .. I love if people are able to get those very high rents ! Congratulations ! $1500 to $2000 for a 1250 sq ft home ! WOW !



Don't be surprised though if they leave soon for a cheaper unit or buy a house for the same monthly commitment ! Keeping your units occupied is the name of the (long term hold) game .. otherwise you become a motivated seller sooner than you'd wish !!

 

[TommyK]

I have been following rents in NE Edmonton and Downtown for some time now (since summer to be exact). The rents for 3-bedroom/1.5-bath old townhouses have certainly gone down $50-100 a month easily.

My interpretation of the trend is that when Edmonton had all-time listings on the market (11,000+ including Comfree), there was actually less available for rent as vendors were trying to liquidate (hence higher rents between Jan-August). Now that inventories have gone down quite a bit (either investors have snatched them or properties got delisted), a lot of those properties have ended up in the rental market. Just like everything else, more inventories of rentals have created more competition. I have seen some ridiculously low rents from desperate landlords. Plus, we are heading into winters, so the rental market is surely going to slow down, and the slow down in construction and oil-related industries... you get the picture.

Having said that, I do find that if you can identify your niche market (or clients), it is still possible to get the rent you desire. Some examples are, properties that allow pets. Properties that have large garage and drive-way for big toys, etc.

I recently rented out my townhouse for $1695 to a young couple. The market rent in the area is between 1450-1550, but because I allow pets, the young couple is very thrilled to move in from Nova Scotia. The boyfriend makes ridiculously amount of money at Fort Mac... so $1695 is peanuts to them. LOL My target market is high-income professional couples. So I speak their language

Another note: Try renting it out for 13-14 months to avoid the same slow market in winters next year. I have been told by my realtor that it is much easier to rent starting February.

 

[JBagorio]

Hi all,

This is a good discussion you have going.

I have slightly similar measurements in terms of my pricing that Thomas has.

I have read everybody`s note and I might be the only forum member who is responding to this thread, but please allow me to add my cent or two...I would say I could not agree more to what Thomas was saying. I think the rent in Calgary and Edmonton has gone down compare to what we are getting a year or so ago. I know that everybody have their own opinion on how much their property would go for, but from my own experience I have been setting my price more reasonable to help me get out of vacancy and in turn gain long term tenancy. So far all my properties in both Edmonton and Calgary have long term tenants that I know very satisfied with what they are paying for. My last vacancy in a long while on one of my newly renovated 1BR Oliver condo in Edmonton was last Aug after a one year lease. We were first asking for its original asking price of $1000 per month, but after 2 weeks of no solid response we have to lower it $50 less to get it rented just in time for September for another one year.

Best regards!



QUOTE (thomasbeyer2000 @ Nov 10 2008, 10:27 AM) ....

So set realistic rents .. and that may include rent decreases or rent incentives ..

Here`s my rough guideline for Edmonton, for an "average" unit:

1BR $800
2BR $1000
3BR $1150

plus or minus 25% for: location, view, size, upgrades, distance to buses/LRT ..

 

[MONEY]

We don`t reduce rents, but rather reduce damage deposit, or offer 2-weeks free incentives for a defined lease term.

This has worked rather well for us in past recessions, and tenants have told us that our incentives were the reason why they chose our buildings over others.

Why affect the cash-flow when there is no need to!

 

[invst4profit]

I believe although Thomas may be wrong as many are saying I also believe he may be right.
People in the know often speak of situations that exist long before they become reality at ground level.
Thomas I believe what you are seeing has not yet filtered down which is why the mixed response.
I believe there will be a serious adjustment where job loss will be followed by a slow rebound involving lower wages.

The situation regarding oil was like a gold rush which when corrected may come back at a more sustainable level.
Big companies often panic in over demand situations but adjust by taking advantage of slower times to bring compensation packages to a more realistic level for the long term.

Going forward I believe holding properties with solid positive cash flow will be crucial for long term survival.
The winds of change are in the air.

 

[Thomas Beyer]

QUOTE (invst4profit @ Nov 12 2008, 06:43 AM)
I believe although Thomas may be wrong as many are saying I also believe he may be right.

People in the know often speak of situations that exist long before they become reality at ground level.

Thomas I believe what you are seeing has not yet filtered down which is why the mixed response.

I believe there will be a serious adjustment where job loss will be followed by a slow rebound involving lower wages.



The situation regarding oil was like a gold rush which when corrected may come back at a more sustainable level.

Big companies often panic in over demand situations but adjust by taking advantage of slower times to bring compensation packages to a more realistic level for the long term.



Going forward I believe holding properties with solid positive cash flow will be crucial for long term survival.

The winds of change are in the air.


indeed my friend .. indeed ...

 

[cldemott]

QUOTE (lwelke @ Nov 9 2008, 01:53 PM)
My property is in Capitol Hill in Calgary, a 2 bed, 1 bath, 820 sf home. New laminate flooring, linoleum, paint, fridge only six mos. ago. Excellent condition interior, exterior of house needs paint. Street parking. Shared laundry. Rented for $1350 plus 2/3 utilities in May, now prices in the area for similar home seem to have dropped to approx $1200 and less.






Yes, sometimes looks a little scary this time of year. We have a 3bdrm main floor for 1500/month in Lk Bonavista (which is SE Calgary, and compares and advertises with Forest Lawn, Dover, etc) so our ads focus on the community and the "beauty" of our rental, location, cleanliness, safety, etc. All the positives! We do have the tenants still paying rent as they did break the lease, so....so far, we're not out any rent. We've had some phone calls and showings. Most folks are looking to rent asap, and have been accepted the same day they apply. We check references so next day is the soonest we can get back to them, and they already have a place. This part is frustrating and we're holding out for the rent we ask and tenants that pass the test of references. There are still many places for rent from speculators. I'm confident we are doing the right thing.



Linda

 

[EdRenkema]

QUOTE (Jack @ Nov 10 2008, 07:46 PM) You`re totally overselling the unit. More vague, less cheese. "Bring your white gloves"..."WOW"...
Try going simple, suggesting a responsible unit for a responsible price. Get people on the phone and talk to them. Nobody`s going to rent from you because you`ve said that it`s clean on Kijiji. Be quick on your feet, establish a relationship on the phone.

Remember - people are already at Kijiji, looking for rentals, so they`ve already been sold on the idea that they need to find a place to rent. And there`s an old saying in business - don`t sell what`s already sold. Make your ad vague, get people on the phone, and make yourself a new friend!

This would be the total antithesis of what REIN has taught me to date, but what do they know.
I honestly appreciate the suggestions but now its all over the map. I have to face reality, other people on West Hamilton `mountain` are getting theirs rented in a snap, its location and most are not yet accustomed to the convenience of the Red Hill Parkway. I`ve changed my ad umpteen times, I`m offering a lot of freebies, I`ve offered it to local property managers, half a months rent just to bring me a tenant. This one could bleed me dry if I have it vacant another 3 months. I`m following the REIN system and I`m sticking with it, altho I`m going to be flexible enough to use a different approach and different location on the next one.
But I still need to get this one rented, I`m angry and frustrated, I`ve poured a lot of time and money into this one!
My first JV is waiting to go....

 

[gwasser]

QUOTE (EdRenkema @ Nov 9 2008, 04:11 PM) Well I`m not buying into the doom and gloom but I`m having a lot of trouble getting any action on my third purchase since joining REIN. It is totally renovated, I`ve advertised since last week of September, now on 3 sites: kijiji, gottarent, craigslist, was on viewit.ca and my realtor listed it on Royal Lepage. I`m $25 below market rent (I`ve got another in the same complex) I`m offering a $100 Xmas gift certificate and a free DVD player with one year lease. Last week I walked the neighbourhood and put out 150 flyers offering $100 to anyone who brings me a tenant that leases for 1 yr. One call this week, one call last week - just tire kickers, here is the kijiji ad:
http://hamilton.kijiji.ca/c-ViewAd?AdId=86...70-0e80ffff794b
What else can I do?
Any suggestions?

I agree with a previous poster. Your photos need improvement. Living room photo is way too dark and gloomy. If your camera settings don`t let you lighten up, use flood lights and avoid photographing towards light (window).

Also, the add has too much text, takes too long to read. I`ve got a short attention span. A (good) picture says a 1000 words.

Hope this helps/

 

[holymoly]

I hope this isn`t too much of a hijack -- if so, please feel free to move it into another thread. (Ideally a public thread so I can read it.

)

QUOTE (EdRenkema @ Nov 13 2008, 11:00 PM) I`ve changed my ad umpteen times, I`m offering a lot of freebies, I`ve offered it to local property managers, half a months rent just to bring me a tenant. This one could bleed me dry if I have it vacant another 3 months. I`m following the REIN system and I`m sticking with it, altho I`m going to be flexible enough to use a different approach and different location on the next one.
But I still need to get this one rented, I`m angry and frustrated, I`ve poured a lot of time and money into this one!

Hi Ed,

I`m sorry to hear it`s getting so frustrating. This summer I bought my first rental property (in Hamilton) and once I finished working on it, I rented it out quite quickly. Almost all the interest came from my Kijiji ad. I`m immensely grateful for all that I`ve learned reading this forum. In a small effort to pay it forward, I`ve spent some time with your ad and have detailed my feedback and worked on an edited version of the ad. (I`m a fulltime professional writer, by the way.)

To be brutally honest, reading your ad made me uneasy. This may seem like an over-reaction, but the effect was cumulative, due to a number of seemingly small things that built up to create a negative feeling. Please bear with me as I nitpick my way through them all....

First, I felt a bit like a dumbo because (even though I know what "inclusive" means) I stumbled over "$1225 monthly plus gas and hydro, water inclusive." If what you mean is that the only utilities the tenant pays for are gas and hydro, I`d drop the reference to water. I`m presuming "water inclusive" means water is included in the $1225.... if you specifically want to say that, I`d suggest using the word "included" rather than "inclusive"... but there are probably other things that are also included, such as hot water heater rental, and I don`t think the first line is the place to start listing them. (By the way, are condo fees included?)

On to the more important stuff. My main concern is that I was left with the impression that I should worry about safety and security.

- The first sentence talks about locking doors --> I immediately worry. Why is locking doors so important that it`s mentioned first-thing; is the neighbourhood unsafe?

- In the next paragraph, the entire complex is just "now" starting to get some attention --> I wonder if it was a dump before, if it`s in a transitioning neighbourhood that still has a lot of transitioning to do.

- "a proactive and reliable management makes this neighbourhood safe, clean, and beautiful" --> I think Yikes, maybe the management keeps this building safe but if the neighbourhood needs to be made safe/clean/beautiful then I`m not interested.

- The unit is "immaculately cleaned" --> I would be thrilled to read the unit is simply "immaculate." But the way you`ve worded it, I find myself focusing on the fact that the unit needed cleaning, not that it is clean. I think, what happened in there, that the landlord feels the need to reassure me that it got cleaned up?

- "bring your white gloves" --> If the previous text had made me feel like I was in an expensive gallery or some such thing, "bring your white gloves" would feel like a positive image. But because I`m already uneasy and my overactive imagination is flitting to what might have made a mess in the unit, the idea "white gloves" conjures up a crime scene. Yikes.

- "your security is paramount" etc. --> Given how my imagination has blown everything out of proportion already, this paragraph`s heavy emphasis on safety and security totally freaks me out. Mentioning police and fire telegraphs to me that anyone who lives in this neighbourhood is going to need to call 911 sooner rather than later. I`m thinking break-ins, arson, etc, not heart attacks.

Sorry to be so harsh. To put my feedback in context, I do spend a lot of time helping clients identify where their communication materials are either not working hard enough or are actually contradicting their intended message. Still, I know that many readers won`t share my reaction, and no hard feelings if you think I`m crazy.

I`ll post my reworked version separately, below.

Best of luck to you, Ed.


holymoly

 

[holymoly]

QUOTE (EdRenkema @ Nov 9 2008, 07:11 PM) here is the kijiji ad:http://hamilton.kijiji.ca/c-ViewAd?AdId=86...70-0e80ffff794b
What else can I do?
Any suggestions?

Here`s what I came up with:


Sparkling 3-bedroom with urban convenience + nature`s beauty!
$1225 monthly plus gas and hydro

Get 15 days rent FREE when you sign a one-year lease by Nov. 15!

Who knew city living could be so easy? With Redhill Valley Parkway only 1 km away, and city busses just a 5-minute walk from your doorstep, you`re all set to spend less time commuting and more time relaxing!

Your low-maintenance, high-convenience home in a desirable condominium complex is ideally located in a friendly, family-oriented East Hamilton neighbourhood. A lush ravine with wooded trails is the gorgeous backdrop to your own landscaped backyard. With outdoor maintenance taken care of by the condominium corporation, your exterior surroundings are no work, all enjoyment!

Inside your immaculate, 3-storey end-unit, extensive renovations and upgrades make coming home a pleasure. Think "new and sparkling" – from floor to ceiling. Fresh paint throughout, plus new carpeting and main-floor laminate, are just the start! Your kitchen, full bathroom and windows are all new, and feature stylish updated lighting and décor. In your bright kitchen, the fridge, stove and dishwasher are all newer and well maintained. The finished basement rec room is a comfy place for busy kids or a cozy getaway for adults, steps from the adjoining laundry room equipped with washer and dryer. Count on being toasty-warm all winter, and cool in summer, thanks to your updated furnace with central air conditioning. Your home is not only well cared for, but also safe and secure.

Peace of mind, ease of transit, nature`s beauty and a lovely 3-bedroom home with space to unwind… what a pleasure!

And now, for a limited time, the welcome is warmer than ever… Sign a one-year lease by the end of November 2008 and receive a $100 Christmas GIFT CERTIFICATE plus a FREE DVD player!

To view this lovely home at 10 Angus Road, please call Ed at 905-329-1460.

 

[Jack]

QUOTE This would be the total antithesis of what REIN has taught me to date, but what do they know.

You`re absolutely right; but, I don`t personally agree with their suggested marketing methods. And, clearly, it hasn`t worked for you in this case, either.

I maintain my position that you`re over-selling it. Your ad sounds way too desperate, and, thus, who do you think will win that negotiation? If one party is desperately trying to find a buyer/tenant, and the tenants aren`t responding, who`s in the position of power?

Reality is, any tenants with anything between their ears aren`t looking for their "dream home" to rent; that`s for the eventual purchase. All they want/should want while renting is a roof over their heads with a responsible cost of living tied to it so that they can put some money aside to eventually buy their dream home.

Vague it out, and get people on the phone!