Tips for Filling Lease Purchase Vacancies - Posted by Craig

Posted by mattc - mi on October 09, 2003 at 07:05:16:

Check out the articles section for lots of ideas:

regards,
mattc - mi

Tips for Filling Lease Purchase Vacancies - Posted by Craig

Posted by Craig on October 08, 2003 at 23:20:43:

Hey Investors - Everyone’s always talking about how to buy. I could use some advice on how to sell on lease purchase. We have been sitting on a 3/2 for 5 months asking at, or just above, fair market rent. We have been running ads and hanging directional signs as well. A few showings here and there but as soon as you mention an option fee, people run. Is there a way to get them in and excited about the house and still collect the option fee with out scaring them off? In talking with other investors in the Charlotte, NC area we seem to be experiencing excessively high vacancy rates even on rent to owns.

Be Flexible!! - Posted by Tarheel T

Posted by Tarheel T on October 09, 2003 at 19:49:11:

Craig,
If it has not been filled in 5 months than you are likely doing something wrong!!

I have filled a few lease options this year(in the Asheville,NC market) and have never had one buyer get the deal that I had advertised. Be flexible with the terms that you will accept. These days I am finding that few TB’s have much at all up front for option consideration. What to do? Consider raising their payment to compensate. Play with the terms that you are offering(purchase price, rent, and fee) and do whatever you need to move the thing!!

You may need to lower your rent to UNDER fair market to get it filled (in extreme cases only). If so, remember that you are getting a better type of resident who will take care of the home as if it were their own.

Also there is nothing wrong with doing a straight rental.

Good Luck in this rather tough rental market,
TT

Price sensitivity… - Posted by JT-IN

Posted by JT-IN on October 09, 2003 at 08:26:03:

If you are sitting 5 months with a vacant property that you haven’t been able to rent/sell via L/O, (assuming that all things are equal here and condition is desirable), then you are asking too much rent per month.

You can either lower it, or offer one or more months of free rent, then having your slightly higher than mkt rent kick in. Take a lesson from the auto dealers and manufacturers. Just this morning I am looking at a 4 page flyer in the paper for a BMW motorcycle ad… You can drive one with no payments for 6 months, blah, blah… I’d be willing to bet that their slaes will go up expotentially due to that offer. Are they taking less for the bikes…? No, they are simply packkaging the cost so that it SEEMS like the consumer is getting a deal. Your local apt mkt is surely offering some freebies to get folks moved in; do some research on that mkt, and then emulate their offers, adapted to your product…

Of course in your case, you would get the Option Fee up front, maybe no rent for the next 30 or 60 days, and then mkt rent, or slightly higher. Imagine is you had done so 60 days ago… spotting the temperature of the mkt, you would now have paying T/B’ers… in all likelyhood.

Just the way that I view things…

JT-IN

Re: Tips for Filling Lease Purchase Vacancies - Posted by Dan-IN

Posted by Dan-IN on October 09, 2003 at 08:24:08:

Craig,

I use the term, “down payment applied to the purchase price” when negotiating.

The term, “option fee”, may scare people off. I use that term in the option contract, but never verbally.

No one wants to pay a “fee”.

Good luck!

Dan-IN