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A few years back we bought our first rental property.  We put a lot of time and effort into the purchase and rehab which is why I was really excited when I got my first call from a prospective tenant to rent the property.  He called me up and we had a very good conversation.   By the end of the call we decided it was best that he come and take a look at the property, so we made an appointment to see the property the following Saturday.

So that Saturday I went over to the property early to make sure everything was clean, and I even brought over some candles to make sure the home smelled  nice.  Our appointment was for 10am that morning.  I can still remember sitting there at 10am…then 10:10…then 10:20…still no sign of this guy.  After waiting for 25 minutes I decided to call him, and when he answered I asked if he still wanted to see the place.   He simply replied:

Sorry I changed my mind.

And that was that.  Quite frankly I was really upset.  How did this guy have the nerve to change his mind and not have the decency to call and let me know.  I had wasted several hours of my time just preparing for the showing but it was no skin off this guy’s back.  Well, since then I’ve learned a few things about showing properties to tenants and perhaps the best idea I’ve come across is the idea of the rental open house.

As we talked about in last week’s blog we paid one of our tenants to leave which created  a vacancy.  Under that scenario the agreement was that we would pay her to leave as long as the property was left clean and with no damage.  This of course allowed us to begin showing the property immediately after the tenant moved out.  So, I made it a goal to fill the property within 72 hours after the tenant vacated the property and here’s what we did…

I started all the marketing for the property the week leading up to when the tenant would vacate.  The marketing included advertising on Craigslist, Vflyer, and placing a sign in the yard.  This marketing worked great, and the phone started ringing early in the week.  Now rather than set up individual appointments with each prospective tenant, I told them I would be available to show the property at 10am on Saturday.  I didn’t tell them this, but I was creating a rental open house.  The goal was to get as many people as possible lined up for the 10am showing.  The current tent was set to move out on that Friday, and I was able to get 7 people set up to see the property at 10 am on Saturday.  This of course was a bit of a risk because I wasn’t 100% sure the property was going to be clean, but I did have the agreement with current tenant, and I was relying on that.  If the house was a mess my plan was to reschedule with everyone.

Well, things worked out with the current tenant on that Friday, and the place looked great.  So we were all set!  On Saturday morning, I arrived at the property early to make sure everything was in order.  I brought some Febreeze to enhance the smell, and I fully inspected the property to make sure everything was in working order.  Then I began to wait.  At 10am the first prospective tenant pulled in the driveway.  Then a few minutes later the 2nd showed up, and about 10 minutes after that the third showed up.  Only 3 out of the 7 people I spoke with actually showed up, but I didn’t care about the 4 no-shows…I had 3 fish on the line.

I’m happy to report that even though I didn’t get 100% attendance it was a complete success.  All three of the people that showed up submitted applications.  Furthermore, not one of them tried to negotiate the rent to a lower price (even though I listed it $50 higher than the previous tenant was paying).   In the end, 2 of the 3 prospective tenants qualified.  By Sunday we signed an agreement with one them, and they moved in this past Tuesday.

So you can see that setting up your showings with multiple tenants is a good idea for a few reasons:

1. It maximizes your efficiency in showing the property
2. It minimizes the risk of having nobody show up
3. It creates a sense of competition for the property, and the tenants are less likely to negotiate.

The bottom line is that this is the model for how we will show our properties in the future because it simply generates excellent results.  Furthermore, you can see the result of how the Cash for Keys offer and the Rental Open House worked together.  We used these two ideas to minimize the vacancy period, and now this property is once again performing very nicely for us.

In total this vacancy cost us $375 which was $300 to pay the tenant and $75 for 3 days of vacancy.  However, when you consider we were able to increase the rent $50 over what we were charging, we will actually come out further ahead in the long run.  Of course it’s better to have no vacancy but in this situation I’m elated with the results!