Have a property to rent out and in about 3 weeks, I have received about 20 enquiries and I have rejected all of them till now, mainly because of their income to rent ratio of 3:1 hasnt worked out or the credit score is not right ( even after benefit of doubt) etc.
I am wondering if reducing monthly rent by $50, would increase the renter pool for me to choose a better tenant? Has any of you experienced this situation and used this tactic? Appreciate your comments.
20 is still a good number of inquirires. If you want to get it rented sooner rather than later, you could always pick the applicant with the best ratio and also the best credit score or no rental judgments and good rental history. You could also advertise more: have a sign, put up flyers if that is allowed, several ads on Craigslist (renewed every other day), put ads on hotpads, trulia, zillow, etc all costs nothing.
Imagine you are in your early 20's and into the dating scene. You are not out there looking for an "easy" win. Rather, you are looking for that one special someone you will spend the rest of your life with.
So, would you lower you standards because after 20 dates all you are getting are those "easy" wins? Or will you stand steadfast on your policy to find the one that is worthy of being your eternal mate?
That was deep but hopefully you understand what I am getting at.
If 0/20 people can meet the 3x income then you may want to double check and make sure you're not way overpriced. If you feel you're asking the right amount then you'll just have to wait it out until that once good applicant comes by.
There's an adverse selection problem in that the average applicant is worse than the average tenant.
The average tenant might get accepted at 50% of they apply. That means they are seen by 1 or 2 landlord as an applicant and then they're out of the applicant pool and have a place to live.
The average applicant is rejected multiple times (and so shows up as an applicant more often).
If you're getting the inquiry flow and are confident in your rent being average for the type, size, location, and quality of property you have, stick it out a bit longer before re-evaluating.
When we lower our rent, it backfires. Even when we think we've scored a real gem, they end up not staying. Agree you should stick to your guns at least for awhile longer.
Review your criteria and make sure they align to the attributes you are looking for in a tenant. What if an applicant is really close to your income requirement, but has been paying the same amount of rent and making it work, have great references and have lived int eh same place for years, and can pay a higher deposit? What if part of income is in government subsidies that won't be taxed, so their income has more buying power? I use a point system. There is a minimum income requirement, but they get extra points for having the range of income I'd really like, and they gain or lose points for how long they've held their jobs, lived at addresses, etc. If the bottom line is a combination of enough points, they are offered the unit.
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