Are DIY Landlords Really Maximizing their Opportunities in Hot Rental Markets?
Royal Oak, Michigan is a very hot rental market in the Metro Detroit area right now. It’s one of the few suburbs in the Metro Detroit area that has a real downtown area, is conveniently located at the intersection of two major freeways (I-75 & I-696), has lots of restaurants, a downtown community college campus, and is considered a trendy, “cool” place to live.
So, it’s not surprising that rents in Royal Oak have been increasing more than the national average.
It’s uncommon for a Royal Oak rental property owner to not field multiple calls from prospective tenants the day they put their property up for rent. Property owners can be fairly selective about who they rent to given the current supply vs. demand imbalance.
So, where’s the problem?
Most Do-It-Yourself (DIY) landlords aren’t investing in the proper research to maximize this opportunity!
The Housing Crisis, from 2005 to now, hit the Metro Detroit area pretty hard. Not only has Michigan overall been a top 5 foreclosure state, but on top of that the housing market nosedived here sooner than most other areas of the country and Metro Detroit has lost tens of thousands of high paying manufacturing jobs during that same time – due to the Chrysler & GM bankruptcies which had a ripple effect through even more supplier manufacturers and the local economy in general.
So, just a year or two ago, even Royal Oak rental properties weren’t in high demand like they are now.
We’ve recently put several Royal Oak rental properties on the market, at rental rents significantly higher than last year’s rates, or significantly over what the property owner thought they could get – and we still had multiple applications!
As we have more qualified applicants than available Royal Oak rental properties, we’ve taken to contacting DIY landlords advertising their Royal Oak properties for rent on CraigsList to see if they’d be willing to pay us for a qualified tenant. What we’ve found is shocking to us. We have qualified applicants willing to pay more than these DIY landlords are asking, enough in fact to more than cover our placement fee, and we get hung up on!
We’re amazed that these DIY landlords aren’t interested in making more money than they’re asking AND taking advantage of our professional tenant screening services – essentially for “free”. Several have called us scammers and insisted that there’s no way we can get more rent than they’re asking.
Well we can and the reason we can do so is simple – it’s through better advertising.
Go ahead and spend a few minutes looking at some of the rental property Craigslist ads in your favorite city. Often, close to half the ads won’t even include a curb view picture of the property – more will have that as the only picture. The rental property descriptions are often very crude and don’t even include basic facts like room sizes. Check out our website to see how we advertise rental properties for our clients!
Then there’s exposure. Most DIY landlords only put their rental property on Craigslist and think that’s adequate. While Craigslist is one of the top websites for advertising rental properties in Metro Detroit, you
should note we said it’s “one of the top websites”. There are several others we get a significant number of leads from.
Real estate agents face a similar problem with rental properties. We’re working on a joint marketing effort for rental properties with a prominent local real estate brokerage. We did an analysis for them that showed, even though they’re syndicating their MLS property listings to over 90 other websites, only 18 of those websites support rental property listings. Our analysis also showed that out of last year’s top 20 real estate websites (by traffic) they were only on 2 of the 8 sites that support rental property listings.
Our advertising reaches 34 websites, including 6 of those 8 top 20 real estate websites that support rental properties.
What effect do you think all that additional advertising exposure has on our ability to generate tenant leads as opposed to the average DIY landlord or their agent? How would creating more demand and more competition affect what we can obtain in rent for our clients?
By the way, we used Royal Oak as an example in this article, but the same basic principles are true for any rental market.
So, if you’re a DIY landlord that sees some merit in the logic of this article, please contact us if you’d like our assistance in generating more demand and thus higher rent for your rental property.
The same goes for any real estate agent reading this article. We’d appreciate the opportunity to jointly market your rental property listings so you can get them rented faster and for higher rents and impress your clients.