Grande Prairie Rents

Coreena

New Forum Member
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Hi All, I have a huge problems and hope that someone has some great advice. I have an older 5 bdrm house in GP in South Patterson. I recently had it rented out for $2300 per month with a company in the forest industry. They gave notice in Nov and I haven`t been able to find a tenant yet!!

My property manager has mentioned to me that I need to reduce the amount asking for. I however, didn`t listen and kept the price at 2200/month. As I see that other 5 bdrms are that price. She has mentioned that area makes a big difference in regards to rent. She thinks I need to drop my price to between 1500 - 1800 per month. If I drop the price to this amount I will be in neg cash flow, and with the tenant laws I can`t increase for a year so there is future loss there. However, if I continue not renting out I loose every month. I have changed my add to allow dogs and I was thinking about advertising for 1st month half off.

My manager has also mentioned that GP has a surplus of rental houses right now and that a builder has just put 40 new house on the rental market because they couldn`t sell. And that she is finding that people are tired of sharing and that they are all looking for lower rent.

So I don`t know if I should bite the bullet and reduce my ask price or if I should continue to try for 2200 / month.

Thanks for taking time to read this.

Corey
 

DrewBetts

New Forum Member
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Hi there,

Your story is not an uncommon one at the moment in Grande Prairie. Everything you say is true. We`re facing a market with more rental listings, fewer tenants, and lowering average prices. However, this is just a blip on the radar in an otherwise strong market and good knowledge of your tenant profile and marketing skills will get you through.

If you want to see results in Grande Prairie, you`re going to have to bite the bullet and take on some of the work yourself. Step 1, fire your property manager. I`m serious, do this immediately. We just rented a 3 bedroom townhouse for $1800, so if they`re recommending $1800 tops for your property they`re nuts. There`s one thing I`ve learned about property managers: The only way they know how to rent units is to reduce the rent. Lowering the rent by $500 a month is no big deal to them because they take 10% of the rent. That`s only $50 for them, but it`s the difference between a property that works and one that doesn`t for you. If you`re from out of town and you can`t make a trip there to rent your property, then at least spend the time to coach and train your PM.

PMs in Grande Prairie right now are all playing the price game, meaning you have to do something to stand out. First of all, get your marketing right. You should have nothing less than a lawn sign, 4-7 ads on rental websites, plus a listing in the Herald Tribune. The highest traffic websites in GP are Gottarent, Rentboard, and Grande Prairie Online (free).

Also, rather than dropping your rent, offer incentives to tenants to close them. Offer a gift card or portion off their first month`s rent, include 1/2 utilities offer to do some renos, give a cleaning gift certificate, or an LCD TV on the wall. Whatever works to close them. If you drop your rent by $100, that`s $1200 for the year - a huge hit, plus it serves to bring down the rental market. It all comes down to sales and marketing. PMs just don`t get this game, they`re lazy so they do the only thing they know how and cut prices.
 

ChrisDavies

Senior Forum Member
Registered
Drew, if Corey is right in saying that different areas in GP are attracting rents isn`t comparing your three bedroom to his five bedroom without knowing the areas kind of like comaring a pineapple to a monkey?

I agree that substandard PM`s will drop rents because it`s a sure way to get things filled up and (generally) keep owners happy, you`re skipping some important steps in setting rents...although your incentives are all good ideas.

Doing a 6 month incentive (even as deep as $3-500) is effectively the same thing as being able to raise the rents after 6 months. The other thing is if the price of gas spikes, and GP is ultra-busy again rents will go back up.
 
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