Vacancy Hurts…Should We Fill the Property with This Tenant?

We have a property that we recently got back after an eviction. We had to go in and do some cosmetic work, but it wasn’t too bad. The property has now been on the market for a little over a month and is still vacant.

We are marketing the property on a lease option and started off asking $1,975/mo and $6K down. We are now down to $1,675/mo and $3K down. We lowered our asking prices because vacancy is too expensive. Check out our website to see some of our listings. The subject property is 140 Ryton.

There is a woman that really wants the property but cannot afford what we are asking. She can put $6K down, which is good, but can only afford $1,200/mo. For each additional $1K that a tenant puts down, we lower the monthly payment by $25. So that would mean that her monthly payment would be $1,600 with $6K down, and she can only pay $1,200. Still pretty far off.

After discussing this with Dusty, here is what we may do. First and foremost, we will run her credit to see what kind of person we are dealing with. In the past, we have filled properties based on down payment and not credit. For example, $6K down…you’re approved!! On this one, we want a closer look. Also, instead of signing a year lease and option with her, we are only going to offer her a six month term. She can extend her agreement for an additional six months if she is willing to pay $1,600/mo from then on.

If her credit looks descent and she agrees to our terms, we get a good down payment, get rid of a vacancy, and ultimately, still get what we want.

Category: Property Management, Real Estate Investment Selling Strategies