Duplex Chick

 

 

Pending sales of single family homes were up 36.3 percent and new listings up 2.2 percent over the same week in 2007. Forty-eight percent of the new listings involve lender mediation, while 60 percent of the sales did.

 

The encroaching holidays did nothing to slow the small multi-family unit market, however. Fifty new listings came on the market, down 29.5 percent from last year. Of these, 78 percent involve mediation with a lender. This is up only slightly from the comparable week last year, when 73 percent of the new listings involved lenders.

 

While shrinking supply is sure to drive prices up in the future, such was not the case in this report. While the number of pending sales was up 186 percent, the average sale price dropped from $164,280 for the second week of December in 2007, to $96,810 for the comparable period in 2008.

 

The statistics for the week before Christmas are set to arrive tomorrow. It will be interesting to see if the number of new listings continues to drop.

It seems new investors and first-time home buyers have two big concerns about their first duplex: vacancies and the toilet.

 

Vacancies are a concern of any landlord. The longer a unit sits empty, the more significant the loss in revenue, and the more it costs you, the landlord.

 

So, how do you reduce vacancies?

 

While it may seem obvious, your first strategy is to buy a property in an area where people want to live. Think of the amenities you might want for yourself in a home. Do you like woodwork? Do you need a dishwasher? Access to laundry? Do you need easy access to public transportation?

 

Also consider the types of tenants a property might attract. For example, more bedrooms may be attractive to families; or, if near a university, a group of students. One bedroom units, on the other hand, will appeal to single people or young couples.

 

A fresh coat of paint and a clean, well-maintained property will always rent more quickly than those that are not. Try to make your vacant unit shine when compared to those of the competition. This doesn’t mean you need granite counter tops- just well-kept, clean, and reasonably updated.

 

While all of these are useful and important strategies, there is one more; the most effective of all. Lower the rent.

 

Gasp!

 

This is a common new landlord mistake; one I’ve made myself. It’s easy to look at competitor’s ads on Craigslist and decide your unit is superior, or to base the amount you charge for the unit on the cash you “need”.

 

But, but… yeah, I know. You really have to have $1000 a month for that two bedroom unit with hardwood floors. So, instead of renting it at $900, you hold out for your price. It doesn’t rent. Two months later, you lower the rent to $900 and it fills. So, while you held out, you lost two months of revenue at $900, for a total of $1800; all in the name of getting $2000. In the name of getting a whopping $200 more, you lost $1800.

 

Yeah, I know. It seemed logical to me at the time too.