After three weeks on the market, my Dupont Circle apartment drew two firm offers to lease it, less than a roaring success. My missteps in marketing the apartment likely explain the tepid response.
I’m willing to admit that maybe it wasn’t priced right. It got a lot of showings but not many offers. That suggests that the price was too high. This surprises me because the rent-setting practice I follow is pretty reliable at finding the market price. Since my process narrows comparables down to the Dupont Circle area and up-to-the minute market rents, it should not be too far off from what renters are willing to pay.
One of the problems perhaps is that the apartment looks a bit ragged. Nothing major has been updated in the last three years since the last tenant turnover. This is the downside of having a 100 percent occupancy rate — there’s no time for fixing up the apartment. We usually perform a thorough review during the turnover and leave two weeks between tenants to allow us to paint, install new carpeting and replace old appliances.
Of course, this benefits the incoming tenant but doesn’t help market the apartment, as all these changes are hypothetical. Tenants who may be willing to pay up for the apartment with the bright coat of paint are not so willing when they’re looking at dingy gray walls.
Perhaps I did not advertise the apartment enough. My property manager does not like holding open houses or listing on Craigslist or in the Washington Post classifieds, so it doesn’t get the wider audience that it otherwise might.
While it is my preference that she market it more widely, I understand the property manager’s point of view. She gets inundated with blind inquiries when it is posted on Craiglist, and sifting out the serious ones from the tire-kickers can be time consuming. As a sop to me, the property manager placed a listing in Craigslist for a week. We did not get any applicants for the apartment from this half-hearted attempt.
Open houses present a similar problem: You end up being overwhelmed with too many uncertain prospects to sort through. And an open house is a lot of work. Usually on the weekend, it occupies several hours leading around people who may or may not be serious. There is also the concern that the current tenants are still living in the apartment. It’s a lot to expect them to clear out and tolerate dozens of people tramping through the apartment and fingering their belongings.
In addition to Craigslist, the property manager put the apartment on the management company Web site and the Metropolitan Regional Information Systems (MRIS), a closed proprietary system that gives visibility to other real estate agents. While it may generate fewer inquiries, my property manager believes that the prospects are more serious and, for the most part, have been vetted by the tenant’s agent. This was borne out by the results. A lot more showings of the apartment came from prospects generated by the MRIS; and both applicants for the apartment came in through this portal.
I could have tried social media sites such as Facebook and Linkedin. As I described previously, the original way I marketed the property back in the 1990s was by asking my colleagues around the office. Today, the virtual form of “asking around the office” is posting to my Facebook and Linkedin accounts.
Using social media for commercial purposes grows every day, and the lines have blurred between personal and business. Several friends have listed their houses for sale on Facebook, and as recently as last month I scalped tickets to an NBA playoff game by posting them on Facebook. And four of my Facebook friends have lived in my apartment at one time or another so that could be especially conducive to spreading the word.
Ultimately, I decided against promoting my rental on these sites. Converting my friends into commercial opportunities is too distasteful to me. I use Facebook to connect with far-flung friends from many periods of my life and different degrees of intimacy. Why would any of them, regardless of whether they live in Washington or not, concern themselves with my local rental issues.
On top of that, advertising investment property is exponentially more revealing about oneself than selling two basketball tickets. It tells a lot about you and your personal finances, and I’m already over-exposing myself by writing this blog. I have a professional career as a lawyer outside of the real estate business, and my employer and a lot of colleagues and friends do not know that I lead a double life as a D.C. landlord. The marginal benefit of spreading the word about my rental through social media is outweighed by my desire to not commercialize my friendships.
As a result of these hit-or-miss marketing efforts, there were only two applicants to rent the apartment, less than expected but, in the end, one more than I actually needed. I definitely shouldn’t look this gift horse in the mouth.
A Colorado-based lawyer, Douglas Hsiao has rented out his Dupont Circle condo for 18 years. In his occasional column, he details his search for a new tenant.