Rentals Open For Inspections – The Good and the Bad
By Keith Windle
In today’s real estate market, it’s common to see rental properties “Open For Inspection” when the property manager is looking for a new tenant. While there are some good reasons for doing this, unfortunately there are also some bad.
The good points –
• It’s a lot easier on the Property Manager. If you have a few tenants that want to view the property, the Property Manager can arrange one viewing rather than going back and forth several times.
• You can give the perception of greater interest. Having multiple people at the inspection can give the impression that several people are interested, creating urgency. Having said this, in a rental boom period, tenants already know there will be lots of interest. If this is the case, multiple prospects are not going to make any difference. The down side to this is that if only one person goes to the viewing, you can easily create the opposite effect.
• Prospective tenants can remain completely anonymous. Sure the agent may ask them to enter their details into a register, but nobody is asked for verification during Open Homes.
The bad points –
• As mentioned above, if you only get small numbers at the inspection, the property can seem unwanted. When the rental market is low, this is especially dangerous.
• You could miss out on prospective tenants. What if the Open Home is on a Saturday and the tenant works in retail? You could do a mid-week Open Home, however, spreading the prospective tenants out over 2 inspections will reduce the perception of greater interest.
• You successfully eliminate one of the best screening methods available. What if you had 2 families to choose from – they both came to the same Open Home. They both had stable employment, good rental history, and similar incomes. At the open Home, one family said to their children “This is not your house, stay beside us and don’t touch anything”. The other family just let their children do as they pleased while they looked around. Which family would you choose? With the tenants being completely anonymous (as mentioned above) you have no way of figuring out “which one was which” when you receive an application form.
• An Open Home can eliminate the ability to follow-up. If there is no register of prospective tenants (or an inaccurate one) you are unable to call them the following week to see if they are interested. You can’t ask them for feedback – have they seen something they like better? Is the price competitive? Etc.
• The Residential Tenancies act can allow for tenants to terminate their lease at no cost if they rented the property without viewing it. If you can’t prove that the tenant has viewed the property prior to signing the lease, this could get very costly. With the anonymity of an Open Home, proving this could be very difficult.
Call us on 07 3395 5002 for more information or to discuss what might be right for you.