by Eleanor Trainor
Most people know that “days on market” is real estate-ese for how long a home has been on a market. Lately, with all the homes on the rental market, I’ve coined a new term… “DAYS ON LAWN”.
Days on Lawn is how long a home sits for rent by owner. I’m seeing a lot of homes coming on the market — and sitting on the market— from “Accidental Landlords” and new landlords whose rental rates are a bit unrealistic.
These well-meaning folks don’t have the resources to analyze the current rental market to set an appropriate rent, market the property beyond Craigslist, or properly show the property and therefore they accumulate far more Days on Lawn than necessary.
I genuinely feel compassion for people who are trying to rent out a home right now without professional advice. As I’ve said so many times in my blog posts, I think it shows a great deal of savvy to see homeowners trying to ride out the market by renting rather than selling and new investors taking advantage of the opportunities to build a rental portfolio.
However, I wonder how often this savvy goes unrewarded because the house never actually sees a tenant… or the house has so many Days on Lawn that the owner grows evermore exhausted and market-weary.
The Days on Lawn phenomenon has an impact on all of us in the rental market. Many of the property owners I speak with on a daily basis have been doing their homework in preparation for renting their property by running their own comparative market analysis on Craigslist. They look at CL to find similar properties in their area to get an idea of what rent might be appropriate for their property.
Unfortunately, CL doesn’t tell you how long a given property has been vacant or how much comparable homes ACTUALLY rented for. So, while the house down the street might be advertised for $2,800… you don’t know that this is week 31 on Craigslist. In my latest post on luxury rentals, I show how the math pretty clearly favors dropping the rent a few hundred dollars to attract a tenant immediately rather than playing a waiting game at a higher price.
I’m not saying Craigslist isn’t incredibly useful! Of course, Craigslist is part of my arsenal of tools to help clients set a rent range. Like any tool, however, it’s only useful if you know how to use it well.
A well-respected member of the real estate community here in Seattle recently said that the most important words in real estate have gone from “Location, location, location” to “Drop your price”.* For the moment, this is as true for the rental market as it is for the sales market.
*(Alright people, before you jump in on that one, I think we all know location will always be king! It is simply an illustration of the times.)
See our feature Good News For Home Sales, Bad News For Rentals.
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