I inherited a condo/townhouse in a 10 unit complex several years ago. It’s in California, in a high property value city, so many people rent before they purchase a home. We had an excellent tenant for 5 years but he decided to move to a lower cost area outside of California, right before the Covid-19 shutdown began.
I asked the property manager to lower the rent about 5% and to allow renters with pets. The HOA requires a 1 year lease for rentals and units are supposed to be single family occupancy. It’s been more than one month and they haven’t received a single application or request to view the property. According to the information on Zillow, the rent is in line with other properties and this is one of the few that allows pets.
I’m wondering if I should lower the price again, or wait -probably another few months- until the threat of Covid-19 recedes. Should I take the property off the market during the shutdown? I’m tempted to lower the price and remove the option for dogs allowed. DH and I may some day want to live, at least part time, at the property so I want to remain on the best possible terms with the other owners.
If you want to remain on the best possible terms with the other owners and are at all concerned with the condition of the condo, I would reconsider allowing pets. The worst damage I’ve seen wasn’t from kids - it was from pets. Cats are quieter than dogs, but if you get a cat that sprays, it can do such damage you have to take the wallboard off the walls as well as remove any flooring and underlay to ever get rid of the smell. Of course there are good tenants with pets so you could get one, but if you get a bad one the damage can be horrific.
Do you need the income or can you go without for a few months?
I don’t have rental property now, but used to and was a member of our local RE investor’s group for years. The worst stories ever told in that group were about pets. Section 8 renters were second, but pets were first.
Oh my, we’ve always been dog people so I didn’t know cats could be so destructive. The previous tenant had a docile cat, I guess we were lucky. I’m concerned with the potential for barking since the properties are close together.
We have to pay the HOA fees, but otherwise the costs are manageable. I had hoped the property manager would provide more guidance, but the current situation is unprecedented.
If you and the PM think allowing pets will be helpful, the only tip I’ve heard that seemed to work well was for you to arrange a somewhat unscripted (aka surprise) meeting of the pet at the potential renter’s current property. There was one local ll here who would allow pets, but only if she was able to meet the pets in their current home to see how it smelled, if they barked, etc. This may or may not be an option for you if you aren’t local since your PM is unlikely to do that for you and ll/tenant laws are very local so may not permit you to screen in this way, though.
C19 is going to present big challenges to lls and property sellers in the next year or two. Nobody can predict what exactly will happen but it’s safe to say there’s more risk associated with finding tenants now not just because few people are moving but also because it’s hard to predict who will still have jobs or sources of income six months from now. What is the job and employment situation now and predicted for the area in which the condo is located?
I just emailed the PM and asked her to remove the dog allowance. I would rather lower the rent and have fewer headaches than deal with problems with the HOA. The insurance company would also need to be notified, depending on the breed of dog.
The employment situation has traditionally been good, it is a college town with numerous tech start ups and booming tourist industry. I’m starting to think we should take it off the market and visit periodically for the next year or so, to determine if that’s something we want to do in retirement (split time between homes). We’re a few hours away.
We have also experienced significant property damage from a not permitted dog in a rental that destroyed a kitchen cabinet that we had to replace. We also had to re-carpet the entire place because it smelled way too much like dog throughout. The other tenant had an unpermitted cat and we had to re-carpet that studio as well.
We never allow pets but some tenants bring them in anyway, in violation of the lease. I’d be sure the security deposit is big enough to handle repairs, but within limits set by your state…
If you can do without the income for the next few months, you might consider ‘donating’ the place to first responders who are looking to lower the exposure risk to their families by sleeping away from home (you might even be able to deduct it as a charitable contribution?). In CA, For the duration of the lockdown and a month beyond, tenants are legally permitted to not pay rent, without fear of eviction - and they have up to a year, post lockdown, to repay
Yes to a giant pet deposit (in case someone will being an “ESA.”) CA is under a lockdown now; not a whole lot of folks are inclined to move in or move around.
In some places a deposit is limited to a months rent. So, if rent is $2000, then the regular deposit can be $2000 max, then an additional pet deposit can be $2000 max.
You could also consider charging an additional pet rent, find out from your property manager what those limits are in your condo’s area. I know we pay an extra $50 a month for 2 cats in California, though I do not know if that is the max allowed or if rules are different by city/county. The property manager that was here when we moved in was sort of umm not really informed and I think she only wrote down 1 pet and not 2.
I thought an additional monthly fee for a pet made sense, but the property manager has “additional deposit” in the advertisement.
This is the first time I have been involved in a tenant search, my brother handled it previously and he was very hands off. One option in the contract is “small pets considered”, but I think small dogs can be as problematic as large dogs with respect to barking and accidents. The property manager has a very good reputation so I’m sure she is abiding by state law.
The HOA imposes a set of rules that renters must agree to, and they even have the authority to review rental applications and participate in the selection process. I’m not sure how they can do this without violating fair housing regulations, since it seems to open the door to bias and discrimination.
You can do both the additional deposit and an additional monthly fee if you want to. We had to pay both for this townhouse we are in here in California.
If you want to do that, then have the property manager change the ad.
I’m a LL. This is NOT a time for a newbie to renting a place out. Evictions are not possible, and there are SO many ways that you can be stolen from by a tenant in this business, that I think that the best thing to do is just wait a bit.
As for pets. If the place is nice, don’t allow them. If you’re thinking that you’re going to have to replace the carpets eventually anyway, consider allowing adult pets before then, excluding unneutered male cats, and of course excluding dog breeds banned by your LL insurance. And yes, people show up with giant pit bulls and ESA letters. Which is why we don’t us a property manager - we screen on our own, and manage to filter out those with prohibited breed ESAs.
Others have told me that Facebook marketplace is an excellent place to advertise. I get many responses, but very low quality, very little follow through. The people who respond through zillow offer a little higher yield.
BTW, if you inherited it, you inherited it at the stepped up value. Maybe you should sell it? There is usually very poor profit margin in condo rentals, what with having to pay a condo fee, and if you have to pay a property manager, too, there probably would be NO money coming in if it had a mortgage on it.
If it’s a two bedroom in a university area, you might be able to get away with renting it to two stable grad students, and if anyone bothers you, they can say they’re “living together”, which is true.
I’m starting to get an appreciation for the importance of screening the pets carefully, and am even more convinced that switching to no dogs is the right thing to do. So certain breeds are disallowed as ESA?
I inherited the property and in California that means I also inherited the low property tax base. We plan to either move there upon retirement or try to split time there and in our current home, a few hours away. The HOA fees are manageable, and rents were high before the pandemic.
If rental rates start tanking I can envision a scenario where people are breaking their leases to move to much more affordable comparable properties.
Not a landlord but for each month you don’t have the place sitting empty without a tenant, that is equivalent to 8.something% of annual rent revenue. So, if you think dropping the rent an additional 5-8% will get you a tenant faster, you’ll likely do better or at least the same as more time with no lease.
If you don’t need the rental income in the short term, my advice would be to take it off the market until the apartment market normalizes, by which I mean when people are relocating to new apartments at a somewhat normal pace again, basically until this inactive market becomes active again. Then put it back on the market at a slightly below market rate in order to attract multiple prospects so you’ll be in the driver’s seat, able to choose the best applicant.
Not in California but my daughter moved the first weekend of March. That last weekend before everything blew up.
Her old apartment was a beautiful expanded studio in a desirable downtown area in her town. It was a darling apartment that she had been in for 2.5 years. She only moved because she was moving in with her boyfriend and her old apartment was too small.
She had to the give the landlord 60 days notice and it rented immediately. Rentals in this historic downtown are very limited because many are now Airbnb.
The new tenant was to move in 4/1. The new tenant lost her job and had to decline. So now the apartment is empty I’m not sure the landlord is even trying to rent it until the SIP ends.
All that to say that I think that there is little to no market for rentals right now. I would be patient and wait.
I just found out that I can access a “landlord” feature on Zillow that shows the number of views of my property compared to nearby properties. The numbers are slowly trending upward so it appears there is some pent up demand. Curious to see how dropping “dogs allowed” affects the page views. The rental Zestimate has declined about 2% over the past month and the supply of properties is increasing.
Patience is probably the best advice at this point.
I’m both a landlord and a tenant (moved to a higher COL area where our family is renting). If you are personally screening, I’d talk to people about pets before ruling them out; both our tenants (and we) have a cat, and I feel good about that. I had no idea before we became renters that that would dramatically limit our options, and we would be happy to put in an extra deposit/rent to allow our well-behaved/never-had-an-accident cat. I think if you are having someone else screen it’s harder to get a sense of applicants.
I don’t know where in CA the home is, but my sense where I am is that people are at home and not making any moves right now if they don’t have to. I agree with your assessment that patience will work in your favor if you can afford to do so.