I placed two ads on craigslist Thursday afternoon. My first ad was to rent out SFH#1 for $1650/mo. If rented at that price it would be negative $150/mo cashflow. My second ad was to rent out SFH#2 for $1500/mo. If rented at that price it would be negative $800/mo cashflow. Obviously, I’d like to rent out SFH#1 first at those numbers!
I didn’t have alot of comparable houses to base my rent prices because most homes are either 3/2 or 4/3 1500-2000sf houses. Both of my houses are 5 bedroom 4 bath 3000+ square foot homes. There are not many of these for rent. So I basically added a couple hundred to what others were asking.
To my suprise I received many calls on both of my homes that night. I’ve found that many large families are stuck with 4br smaller houses as their only rental choice. Large rental homes are very rare.
By the next morning I editted my craigslist ad and increased my rent from $1650 to $1900 on SFH#1 and from $1500 to $1800 on SFH#2.
SFH#2 has been rented by a couple with 2 kids from California for $1800/mo. They want to move in in 3 weeks! We talked on the phone and they had an agent come view the house. They filled out an application and have excellent credit and background. I told them the house was theirs on Friday afternoon.
In addition, a family with 4 kids came to see SFH#1 and wanted to rent it at $1650/mo. However, there was a different twist on this one. He had a friend who wanted to buy my house and he was going to rent it from his friend. I talked to his friend on the phone on Saturday and he submitted an offer. Now, I think it is because of my story that I was telling the potential renters about how my sale on SFH#1 fell through last minute and how I now had 2 large homes for just me which led him to believe that I was a desperate seller because his offer was over $100,000 below my asking price! On top of that, it was 100% financing and $1,000 earnest money. Therefore, I just rejected it. Keep in mind that my SFH#2 is rented so now I can move back into SFH#1 to live in, so I really don’t care if I sell it or rent it.
Yesterday, the buyer calls me and tells me that he had expected a counter offer and not a straight rejection. I told him that his price, terms and earnest were just all too horrible to counter. He said that because I didn’t counter that he has no idea what I’m looking for in an offer. I told him about my last buyer and how he disappeared and that I wanted at least $5,000 earnest money. I told him that his price needs to come up close to my asking and that my rent has gone up to $1900/mo on the house and I’ve got alot of interest in it. I think what happened is that since my rent has gone up to $1900 that his friend is no longer in the running to rent my house whether this deal goes through or not. Remember, he saw the orignally $1650/mo ad. However, if this deal does go through, he can rent the house to his friend at the original $1650.
The buyer has submitted a second offer. This offer is a good offer that I can work with. The earnest is at $5,000 and the price has come up over $70,000. I have countered and we’ll see what happens next.
In any case I will be moving out of SFH#2 in a few weeks. I don’t know if I’ll be moving back to SFH#1 or somewhere else.