If you follow the Real Estate markets or own rental property it is incredibly easy to get depressed about the current market situation. As you scan the Real Estate headlines and find out sales have dropped 41% from the last year. Or as you can talk to Realtors, who will tell you about the huge amount of inventory currently for sale or you can even talk to your tenants about how they feel you need to lower rents because there are so many vacancies out 
there. The last trap was the one I fell into with my tenants help.
With this many options and this many negatives, it’s easy to get worried and it’s important to understand where your sources of information come from. My mistake began with talking to a tenant of mine, who was requesting a rent reduction due to the changing market. I am aware there are more vacancies and I know the market is a bit more competitive, I also know what a headache it can be to move. But they were good people so I caved in and ended up offering her a $75 reduction, which wasn’t good enough for her. So I agreed to switch to month to month while they explored their options, without doing any rent reduction!!.So now, here is how the trap unfolded.
When I collected the last monthly rent check, I listened to her story about how she felt bad for landlords like me, since there were so many vacancies out there and so many choices for renters, I may be vacant for quite a while. It was all rather depressing really.
To help elevate the potential depression, I also had another property that was just getting some renovations completed and was currently vacant, plus two more vacancies coming up. It all looked rather glum.
Next, came the reality versus what I had been told by the wrong source, or at least a source with a different agenda. Late one evening as I stressed about how long I would have empty properties, I finally had my ads all written and proceeded to post them online with less than stellar expectations. Much to my surprise by mid morning, I already had my first viewing booked for that day. Then another one came for the following day. Then two more for the other property, then a friend’s son came out of the woodwork interested in the third.
The response took me off guard as I was expecting a disappointing response, but it quickly became better and better. Now the key from my viewpoint is as follows, we like to keep our properties well maintained and updated and this is an example of this tactic paying off. Here we are not even a week later and I have all three properties lined up with new tenants. One will be vacant for less than 24 hours!
When chatting with the actual tenants looking for new places, the real view of the market emerged versus the one I was fed by the current tenant. Yes, there are a significant amount of rental properties out there, many at very low monthly rates. However, it appears there is a reason many of them are languishing on the market and steadily reducing rates and it has nothing to do with an over abundance of vacancies. Rather it has to do with tenants having options of where they want to live and they don’t want to live in dumps!
Resoundingly the tenants informed me that a majority of the “cost effective” properties were not places they would choose to live if they had options. During the economic boom earlier in the decade, people took what they could get, now the landlord and property owners that took advantage of tenants and just pocketed all the profits are feeling the results of their decisions.
So the real message behind this article? You really need to talk to the right people to get the real answers. The neighbour, or the tenant or the Realtor may have an opinion, but you have to do your own research to find out how valid their opinion really is and what is actually happening in the market.
