Landlord Finds a Renter
After Some Concessions

By late June, Jeff Jones had begun rethinking some of his earlier marketing strategies to rent his South Seattle house. Earlier, he had focused on online classified ads. He'd learned that, in addition to investing sweat equity into renovation of the house, he'd have to devote more energy to the rental process -- and, through listening to prospective renters, he learned he'd have to make concessions he had hoped to avoid.

On the Internet, he added a "one month free" clause to his classifieds, hoping the offer will help offset the $1,365 rent he'd asked and secure a 12-month lease. Offline, he reluctantly resorted to posting "For Rent" signs in the Lakeridge neighborhood where the rental is located.

"I didn't put the price on there on purpose -- I wanted to see who would call," he says.

The good news was that the signs generated plenty of calls from drive-by prospects. The bad news was that the majority of the callers couldn't afford to pay what he wanted for the house. Most, he says, were hoping to pay closer to $1,000 or $1,100 -- which had Mr. Jones thinking about lowering the rent.

He also learned more about undesirable aspects of the Lakeridge neighborhood, specifically its proximity to Rainier Avenue, the main artery that runs along the edge of Lake Washington. The avenue originates inland several miles north and crosses through several low-income neighborhoods and high-crime districts as it approaches the water and Lakeridge. But many people associate Rainier Avenue with depressed neighborhoods, Mr. Jones discovered.

He knows he can't change that perception, but he's eager to see the city widen the two-lane avenue and create a three-lane thoroughfare with a center turn lane as well as bike lanes and sidewalk space on both sides of the street. These improvements should alleviate road traffic and make the neighborhood friendlier for pedestrians and bikers, adding to its appeal.

While Mr. Jones has fielded calls from prospective tenants, he has also become a cheerleader for the area: He's visited at least two real-estate open houses recently and posed as a would-be buyer. He then talked up the area to the other potential buyers.

"I tell them ‘I definitely want to be here, but I haven't identified a house just yet,' " he says.

In mid-July, Mr. Jones got a call from a woman who described herself as a neighbor who had seen one of his "For Rent" signs. She said she was trying to help her recently divorced daughter, who lived two hours away and wanted to move back to Seattle. Mr. Jones's rental was only four or five blocks away, so the woman thought it would be a good location for her daughter as she recovered from her divorce and looked for work in the area.

Mr. Jones showed the mother his house, but he thought the meeting didn't go well.

"She had no hesitation about telling me what I needed to do," Mr. Jones says. She criticized the kitchen tiling (left behind by the prior owner), along with the lawn, fireplace detailing and the semi-finished basement. "I told her I'd consider some of those things. I'd say for about 30 minutes I sat there and just listened," he says.

He offered to make some aesthetic changes if they would appeal to her daughter, but believed the mother didn't like the house.

"I wrote her off," he says. "I was left with the impression she wasn't interested."

To his surprise, the daughter called the next day and appeared with her mother.

He let them tour the house alone, hanging back rather than following them and making a pitch about the property.

Then "they came together and grilled me," Mr. Jones says.

Mr. Jones took a diplomatic approach and tried once again to show his neighbor, and now her daughter, that he was a good listener. He believes his ability to listen and show empathy -- skills he must use in his corporate sales job -- were what helped him win over his now-tenant. The woman and her mother eventually told him they wanted the house.

They also were looking at property in an area of South Seattle called Bryn Mawr, near the Seattle airport. The rival property had a similar price and water views, but a large management company was handling its rental. The mother and daughter worried about the company's ability to respond to problems or questions, whereas Mr. Jones was a cellphone call or e-mail away and had asked several questions about how he could make the house more appealing and livable.

"Having that level of dialogue really helped," Mr. Jones says. "Responsiveness was a very big thing to them."

After some negotiation, he decided to offer the house to the woman and her dog. He trimmed the monthly rent to $1,165 -- a price that excludes the month free he advertised online.

"I quickly took all the one-month free classified ads off of the Internet," Mr. Jones says. "She knew nothing about that."

The rent price is about as low as he could go and still nearly break even on the house after he factors in deductions he'll make on his 2004 income-tax return.

Finding a renter took more time and attention than he expected, but a "For Rent" sign and some yard and interior work ultimately attracted a renter whose profile didn't meet his initial expectations. She has a dog (a Boxer) as well as some blotches on her credit report. But Mr. Jones realizes that many Seattle house renters have dogs, and a bit of poor credit can be outweighed by a personal connection to the neighborhood, such as a mother nearby.

He greeted his tenant, who took the lease effective August 1, with a $30 basket of fruit and chocolates, a small gesture after three months of mortgage payments and about $7,000 in labor and material to turn his purchase into a rentable investment property.

But Mr. Jones says he wants tenants to be happy and have a personal stake in maintaining his property. He once rented an apartment from an older British couple who lived next door and frequently invited him over for meals. He didn't realize it at the time, he says, but that level of personal connection motivated him to take good care of their property.

"The difference, they said, was that I treated this place as my own child," Mr. Jones says. "I think [they] really appreciated it."

He supplied a list of phone numbers for police, utility companies, libraries and other useful services nearby. He wants his tenant to feel welcome, he says.

"You need to almost create an atmosphere of responsibility," he says. "I'm a busy person, I told her, but I want to make this comfortable for you."

"I am so jazzed," Mr. Jones says. "Now I'm landlording."

-- Ms. Hodges is a free-lance writer in Seattle and writes the Investor Profile and Landlord Chronicles columns for RealEstateJournal.com.

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