Last Friday, genius and investment property guru Matt Scharf, was at my office listening to me bemoan an issue with one of our rental properties. When I first met and found out that he actually volunteered to be on the Historic Preservation Commission, I had my doubts, but Matt, wise beyond his years, made a simple suggestion that has changed my life.
Adjacent to our offices and near our other ventures on the Northside of Downtown we own a really old, really run-down house that was initially purchased for future re-development (developer-speak for demolition).
We bought the house about 5 years ago. It was a rental property and the tenant had lived there for over 25 years! I had never been in the home, we bought it for the land only and had no reason to be concerned with the condition or quality.
Well a couple of weeks ago the older lady who had lived there for so many years moved out to be closer to her daughter. The house is at least 50 years old and needed a lot of work – but therein was the dilemma:
If the value of the property is in the land how do you justify spending several thousand dollars to fix up a house that may only rent for $500 per month when you know that maybe not today, but eventually, you are going to tear the place down? I mean, it almost makes more sense to just leave it vacant.
And that is where Matt’s rental property acumen came into play.
“Why don’t you put it on Craigslist and just rent it “as is” and don’t charge a security deposit?”
“But Matt, this feels like such a slumlord thing to do. All of our rental properties are new, nice and clean. This place needs serious help.”
And Matt replies, “Maybe, but people need affordable housing and allowing THEM to clean the place, paint the walls and make it their own helps them and helps you.”
I told you this guy was brilliant!
Be forewarned, I have never bought, sold, traded or otherwise utilized this free classified online service – but I am telling you right now, it has changed my life.
Here is the direct copy, verbatim, of my listing:
“Crappy old house on the Corner of N 3rd and Brunswick with lots of character and a killer location.
Across from PPD and Cape Fear Community College. Near Modern Baking Co and other new projects on N 4th including the Goat and Compass. Single Family House. Three blocks from River.
Needs a good cleaning but will rent for $500 per month as is with NO SECURITY DEPOSIT REQUIRED but must have a JOB and at least two people who will VOUCH FOR YOU (one must be a past Landlord). Drive by, check it out and email me if you want to get inside. Available now.
Pets OK as long as you clean up after them.
Check it out!”
And Craigslist makes it real easy. I didn’t even have to go and take a picture of the front because when you list the address a link connects you to GoogleEarth which will show you the house from the Street!
Logging in, writing the ad, proofreading and posting took less than 10 minutes – and within two hours I had 7 replies. By the next morning I had 15 with 5 who had visited the house and wanted more information.
One guy was so interested he took it upon himself to forward his information along with his resume and references before I could ask. He loved the place and loved a good deal. We had an agreement within 18 hours of my initial posting and he moved in two days later.
It was a ‘win’ for both of us but the story doesn’t stop there.
After our new resident moved in he realized the stove wasn’t working. It was a gas range and even though I didn’t want to spend any money adding value to this house I still had my principles.
A new gas range is at least $800. So, why not go two-for-two?
I went online and not only did I find an excellent gas range (also located downtown) for $100 (which I swear was at least $1000 5 years ago when it was new). I also found another guy who would come get the old stove and an old freezer and haul them away for free. It was a Craigslist trifecta!
All this coming from a guy who was certain back in 1993 that the internet was another fad and would be likened to the betamax, boy bands and probably even parachute pants.