How will listing your property for rent at the right time change

Please note that this post is an excerpt of the webinar hosted by our sister company, The Landlord Code, where our co-founders coach DIY landlords how to avoid problem tenants and maximize rental profitability. Get access to more training like this in our (free!) private Facebook group HERE.

Today we are just going to jump right into it and teach you how listing your property for rent at the right time can dramatically change your results. Now we’ve seen this every day and our rental business, since we started, what 16 years ago, we started to pick up on the trends pretty quickly. And it’s one of the top questions we get. When a new landlord comes to us at our brick and mortar property management company, foundation homes, property management, located in Marin county. It’s one of the top questions we get is what’s the best time to list. My rental is now a good time and people want to know how can they situate themselves to get the best results. And if you’re asking yourself that question, I applaud you because this is a strategic question to be asking.

So here’s the problem. People don’t realize that if you list your property at the wrong time and you don’t, you really reduce the amount of rent you can command. Not only will it affect you the first time around, but it will affect you year on year after until you change the time that you’ve missed your property for rent, or just change the rental cycle. And yeah. Yeah. So if you can control the world then awesome for you. But if you can’t, we’re going to give you some strategies today to talk about how to get on that good cycle and how to approach your Thousands of dollars back in your pocket. So we’re going to go over three steps and we’re just gonna jump right into it.

So step number one, know what drives your rental market? Who is, who is renting your property? Why would they do that? Okay. So a lot of DIY landlords, no matter what market you’re in, may not know that this is a question you need to ask, right? If you ask, say you have a realtor who sold you a property and you and your landlord, and you’re turning it into investment. And you say, when’s the best time to list my home. Well, that realtor may not know. And you may not have any choice because you’ve just closed on the home. And now you’ve got a vacant property, right? What you need to do is make some calls. You need to call around to the people who will know, who are the property management company, A couple of property management companies. I know one, one really great property management company. Yeah. So like a gazillion property management companies. Cause we network throughout the U S and we can tell you, the property management companies are the ones who are doing the in and out, right. They’re handling. They know the tenant volume in their area and not all areas are the same here in Marin county.

Our strong sales market is with the spring market. So as a lot of families are popping around in homes here, and they’re selling their homes that too is what’s driving the rental market. So in Marin county, the spring is hands down the absolute best time to have your rental property on the market. Now that’s not to say the summer can’t work or the fall can’t work. And our market, we do see a quick pop in the fall, but we know every year that as we get into October, we start switching our strategy and advising our clients differently because you have to approach it differently in our market when you have a rental in November, December, January. Okay. Yeah. And, and, and not only is the time of year. It can not only can, the time of year really impact your rental property, but also where it’s located. And sometimes the time of year and where it’s located have a really dramatic impact. So if you want to hedge your bets, maybe you’re in an area that doesn’t, isn’t pushed by school district, or isn’t pushed by amenities. And that area generally is maybe it’s further away from the city. Like some area parts of Marine county, those areas generally take a little bit longer to rent. And they also are very susceptible to market conditions. So the timing becomes very, very critical inside of those areas. So again, yes, talking to your, your local property manager, finding out when the best time is to rent your property and also how you can reset that retro cycle, which is a great point. Yeah. But before we jump into sub section two, just one more thing on, on the first topic on knowing your market, a lot of people, especially throughout the U S there are different types of markets. Like you may live in a military area, right? Where maybe you don’t see the same cycles that everywhere, because they’re constantly bringing new military families in. So that’s a whole different market, but you want to know what that, how your market performs, right? Maybe you live in a popular ski destination, right? So maybe it’s somewhere like Aspen or Tahoe, where you’re going to see a lot of activity over that holiday season, right? So you want to know that about your rental, maybe you live somewhere on the east coast where you can get ’em, what do they call them nor Easters or something that affects how tenants are perspectively going to be moving around. So every market is different and you want to know, you want to be asking the questions. So you understand what is special about your market and what drives your market. So ask a property manager, or if you’re talking to a real estate agent, ask someone who actually spends a lot of time, leasing properties, not just someone who sells properties, they’re not going to know someone who leases. And so what if you have a property that comes available in off time, maybe it’s like in a winter time or a time where there’s nobody looking for rentals.

What do you do then? And that’s the question that comes up all the time. Generally in our area, you can actually kind of get a better deal in winter time to buy a property, to buy a rental property because the market is slowed down. So people oftentimes will buy a rental property in the slower market and want to rent it. But they’re in this position now, like, well, I’m not gonna be able to maximize how much money I can get from my rental property. So what do I do? So we do see people losing sleep over this. And really, we’re not telling you this. We don’t want you to lose sleep over this. Here’s the thing about owning a rental property. It’s a long game, right? You’re not in it for the quick fix, unless you’ve got a specific scenario where you’re only leaving for a year, then it just is what it is. And you’re renting your home when it comes up. And it doesn’t matter, but everyone else you’re in it for the long run. So let’s say the first year, you’re not on the perfect cycle, big whoop. We’re going to take your lease whenever it’s available. And we’re going to talk about, talk through your strategy and we’re going to write it so that the lease ends at the ideal time. So it may not be a typical 12 month lease. And I’ll give the example of our personal rental that we just did were leaving in August. And so the homes available in August, that’s not quite perfect for our market. It’s just a little bit late. So we made our home available either for a 10 month lease or for an 18 month lease available renewable for every 12 months thereafter, because we know how important it is to have a home in our area, in Marine, on the market, in the city. Right? So let me tell you how that can really impact your ROI.

Not only can you get a little bit more money per month for your red zone and the hot times, but also it minimizes the vacancy period. And as we all know, following us, I’m going to get a t-shirt that says, this is that vacancy is a number one ROI killer. So if you can reduce your vacancy, even by one week or two weeks, that’s thousands of dollars that could be put back in your pocket. And then your property will re reset year after year on that same cycle. And that just going to increase your ROI. In addition, you’re going to be able to increase rents because in hot times of the market tenants don’t have as many rentals to choose from. So that’s going to help you.

Number one, you leverage the fact of limited supply to do increases at the renewal time, but also keep your tenants in place because they’re not gonna want to move into in a hot rental time. Right? So that’s, that’s another, that’s another thing you should think about when you are considering renting your property. And again, the longterm game, maybe you don’t rent it for 12 months. The first time around you read this for six months or 18 months, but the next time around, you’re going to be really positioned well to take advantage of it. Right? And it also depends what your end goal is. And if you’ve been following us, you know, we preach about strategy a lot, right? We’re not about just throwing your property out there, renting it. We’re about what’s your end goal. Are you eventually moving back in? Are you eventually going to sell this property? Is this a long-term rental? And are we going to look at the longterm ROI and how we can long-term increase value at this property? So you need to be asking yourself these sorts of questions, no matter what time of year your property comes up.

So you can decide your strategy for what length lease you’re going to put out there to have the best result. So what ifyou’re, we can’t control the lease term or legislation conditions like you’re in a month to month lease. And it’s just rolling over a month to month. You’re getting into the winter is getting a little scary. You don’t know if your tenants are going to leave or not. How can you control that to keep you on track? So this is step three, step three is figuring out alternative solutions when things don’t go your way. Right? So there’s a lot of different, like Christopher said, a lot of different legislative, legislative changes coming across in different states in California. We’ve got AB 1482 that came about in early 2020 that made a lot of properties with rent control and then all kinds of crazy legislation since then. Sometimes you can’t, you may get your property on this ideal rental cycle, but your tenants won’t necessarily renew. So there are a lot of, they won’t renew for like a one year, right? They just go month to month, or we need a lot of landlords out there in other areas. We don’t see this too much in our area, but in other areas where they just want to go month to month and they feel like that gives them a better protection. So we don’t recommend months a month usually because inevitably your tenant is going to give you notice right before Thanksgiving, which in most markets is like worst time, you’re almost guaranteed extended vacancy, right? So you really want to hedge yourself against that by not allowing a lease to end, but if you can’t avoid a month to month or you really feel strongly about it, there are ways that we and our portfolio are working to entice our tenants to sign a 12 month lease through incentives. So usually we give them two different price points, if you would like to go month to month. And if we can’t prevent them from doing so, then you get essentially the maximum price raise that the law in our area is allowing at this time.

However, if you would like to sign on for our 12 month lease or whatever lease term it is that that property needs, then we’re going to give you this preferred rate. And what we’re finding is a lot of people do prefer the preferred rate. And also a lot of tenants prefer to know that they have some security, because in addition to them being able to give you notice at any time on a month to month lease, you can also give them notice on a month to month lease in California. It’s a little bit different, but you do have to provide a longer lead time for the tenants than tenants have to provide you. But there’s also that security, that security and certainty element, that’s an it’s, you know, like to grasp onto it. And if they can get a better deal on the rent, why not? Right, right. Right. You mean for everyone other incentives that we’ve seen landlords use is maybe like, maybe there’s a repair request that that tenant has asked for. It’s not a habitability issue. So the landlord doesn’t have to do it, but it’s something they want. Like, what’s a good example. Maybe they want a room repainted, want a new microwave or a new oven or something Like that. Or they want like the back deck power washed or something like that, windows claim yet. Or we had a tenant recently want new window drapes in the back in the front, Or have any carpets cleaned, right? That’s another one. So that Lamborghini or whatever, or whatever, you know, a lottery ticket, whenever you can provide to them, that’s gonna encourage them to commit to 12 months. I say, go for it within reason. But listen, things are going to happen to you. And the most important thing that we want to drive home today is that is there’s always this unknown element. There’s all these variables that you can’t control. But being in being able to anticipate them and be able to anticipate how you’re going to deal with them when they do come up is actually going to be the biggest key to you for you for success. Long-term. Yeah. So one of the biggest mistakes we see DIY landlords or new landlords, or even landlords, who’ve been in the game a long time. And it just kind of in sleepwalking and coasting, the biggest mistake we see landlords make is failing to treat your property like a business. And look, it’s not your fault, right? The media, the whole world out there tells you buy this rental property. It’s the rich dad, poor dad. It’s the HGTV. It’s the flip or flop, right? Just buy the thing and you’re going, Well, my money is going to my is just going to start flying out the window. It’s going to go, right? I’m flying if I’m the window into your house, into your pocket.

But here’s the thing buying the thing is 25% of the journey. Congratulations. If you’re there, you’re already way ahead of everybody else. But there’s another 75% of this deal that nobody talks about. And that’s why nobody knows about it. And that’s managing the thing. And that’s where all your money gets made. The money he is in the details. My friend, If you think about it, in terms of buying a house, you walk in a house is amazing. That’s like the 25% of it. But the 75% of the work is like going underneath the house and like digging through all the dirt and the foundation and all that stuff. You’ll do that. It’s not fun, but you do it. And then look, you find you identify problems and you fix them. But yes, there’s a lot of work. And that, that, that 75%, that difference is what’s going to determine whether or not you’re gonna have a successful business or a business that’s going to cost you money. Long-term Right. And look, you didn’t get into this rental property business to have a second or third job, right? You got into it most likely To make money, make money, To have that, that retirement dream, the toes in the sand that pina colada or mango colada. For those of us who are allergic to pineapple to have that dream where you’re sitting on a beach, you’re working on your time and you’re making money while you sleep, Showing up the way you want to every single day or life. Right? So you can have that dream. If you take the steps, if you have a playbook, if you have someone by your side, either a doing it for you, right? If you want to hire a property management company, let them worry about all this legislation and strategy and make sure they’re a partner who can advise you. So you can be the dude in the sand, do that in the sand with the, with the cocktail and the kids in the water and all that fun stuff. Or you can do it yourself. As long as you take the proper steps to educate yourself, what you cannot do is exist in the in-between. And that’s the mistake that most people make. And that’s the mistake that will leave you as a landlord, running for the Hills, selling your property, wanting nothing to do with being a landlord, ready to get out of the business. And you will be losing the potentially hundreds of thousand dollars of personal wealth building. You could have. If you just set the thing up right to be right, You can, you can be reactive as a landlord, but the landlords that make the most money and have the most long term success. And then the ones that you hear about in the news or in books or the ones that are proactive 100% of the time, okay? Treating the rental properties like a business, which has everything that we are here to teach you. As foundation homes, property management, we can be your property management partner. We take care of all this jazz for you.

If you are one of our lease only clients, or if you are one of our nationwide members of our audience, we run the landlord code. We are the co-founders. We have our course launching soon, and we will be there to hold your hand every step of the way and show you how to be the best landlord that you can be. I’d like to learn a little bit more about foundation homes, property management. She can drop the link in the chat there for you. In addition, if you want to learn more about being a landlord or you’re actually running or learning how to better manage your property management company that you’re working with. Check us out on the landlord code.com. We’re going to be here every week at Thursday on the rental rescue show. And I’m super excited to announce our summer series, which is dropping on June 4th. It’s going to be filled with VIP opportunities for you to learn some really serious stuff about running your rental property, like a business. And it’s going to set you up for long-term success. Yep. So we’re announcing the lineup next week. And for everyone who’s participated in our survey, thank you for giving the feedback on the topics. We’re announcing the lineup next week. And we will be here all summer long, every Thursday, June through August. I think we’re taking one Thursday off for We’re moving. We’re moving. Yeah. Well, we might do that in the truck. I mean, I don’t know. I think we should do like a lie alive from the airplane as our, as our two year old starts ripping off his mask. And I don’t know, as we get, as we get carried off the airplane, we’re working on it and your faculty. So we appreciate your time today. And we look forward to seeing you next Thursday.