So Girl Ninja and I continued “Operation Don’t Be Homeless” yesterday. We looked at two different rentals. They both had great potential, but one of them really won our hearts. It is a 1br/1bath condo 100ft from the ocean. It has brand new stainless steel appliances, granite counters, a great layout, a dishwasher, and a washer/dryer (which is pretty rare in small rentals here).
The asking price for the unit is $1,500, which as you know, is the maximum rent amount I’m comfortable with. For those of you who just pooped your pants ’cause $1,500 for a one bedroom seems crazy expensive, please read this article. The condo has been available since April 1st, which means it’s been vacant for almost two months.
Most of the places we have looked at become occupied within a week of being advertised. It seems a little odd that this place hasn’t followed suit. It concerned me so I called my Realtor friend who is familiar with the area. She looked at the place and thought it was about $100/month overpriced.
I gave the property manager a call and told her Girl Ninja and I would be happy to fill out an application if we could rent the unit for $1,400/month. The manager basically said the price is firm and the owners aren’t willing to reduce the rent. I left the conversation frustrated. This lady must be crazy. It has sat vacant for two months and she’s not even willing to negotiate a little? WTF?
Well, being the PF dork that I am, I came home and started crunching the numbers. I’m convinced our offer was completely fair and needed to be reconsidered. You all know I’m a huge advocate of “putting yourself out there” so I decided to send the property manager an email asking her to reconsider our offer. Here’s that email…
This is Ninja. I talked with you a few times today about the condo you have for rent. I know when we spoke earlier, you indicated the condo owners are not willing to negotiate. Girl Ninja and I are hoping you will reconsider our offer.
We both graduated from (insert college here) and have lived in San Diego for the last six years. I’ve worked for the Federal Government as a Special Agent for the last 2.5 years and Girl Ninja is an elementary school teacher. We would be the perfect tenants as we both have extremely stable careers and would never have a problem paying the rent on time. We take our financial situation very seriously and have excellent credit (mine is 760 and Girl Ninja’s is over 700 as well). We will be debt free on July 1st, when I send in my last student loan payment. Neither of us smoke, drink, or even party. We are extremely clean and quiet. Furthermore, we have excellent track records as far as renting is concerned. I have lived in my current apartment (which is a month-to-month lease) for the last 31 months and Girl Ninja has never lived in one place for less than a year.
The condo has been available since April 1st which means next week it will have sat vacant for 2 months. That’s a $3,000 loss of rental income for the owners. Sure, our $1,400/month offer may sound low at first, but if you run the numbers it really isn’t.
If the owners rented to us at $1,400 for a 6 month lease, they would be agreeing to take a $600 loss during that time. Again that may seem like a big loss, but it is a lot better than remaining vacant.
If you multiply $1,500/month by six months you get a total rental cost of $9,000. If you divide the total cost ($9,000) by the total number of days in those six months (182) the condo’s daily cost is $50.
I’m breaking the numbers down to make this point: If the condo goes unrented for another 12 days ($50/day x 12 days) the owners would incur a $600 loss of rental income, and potentially much more. With our offer they guarantee only a $600 loss. By waiting for a full price offer they risk losing thousands in rental income.
If they think they can get the condo rented within 12 days, then that is in their best interest, but if it remains on the market any longer, it would have been better financially for them to rent to us. The question is not “Is our offer too low”, but really “How long until they will find someone willing to pay full price?”
Girl Ninja and I would be more than happy to help minimize their losses by becoming the tenants, but we have to do it at a value that we feel comfortable with.
If you could at least look over the numbers and speak to the condo owners about our offer, GN and I would be forever grateful.
I’d love to talk this over with you.
There you have it peeps. It’s really hard trying to communicate financial information in an email without sounding condescending and/or redundant. How do you business folks do it?
If the condo had only been vacant for one or two weeks, I would totally understand why they’re not interested in negotiating, but it’s been available for 2 months now. I don’t expect them to accept our offer, but I personally think they would be CRAZY not to? Hey, it doesn’t hurt to ask…right?
If you were the landlord how would you handle the situation? Am I overlooking something here? Or are they as stubborn as I think they are? Any advice? Do you have any negotiating stories (good or bad)?
I’ll be sure to let you know if I get a response 🙂