12 responses to Craigslist ad in less than 24 hours - raise rent?

General Landlording & Rental Properties
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12 responses to Craigslist ad in less than 24 hours - raise rent?

Jesse Gebauer
Sacramento, CA · Member since 2015 · 12 posts · 0 votes

Hi all,

I just posted my and my wifes house online for rent yesterday afternoon and I've already recevied 12 inquiries.  

My asking price for rent is $270 less than what it will take to cover my mortgage.

So, my question is, am I able to email back those interested parties and let them know we will be asking more for the house due to the level of interest?  Or am I basically stuck at the advertised rent?  None of the interested parties have received or filled out an application (though, we have one application at the moment, from a friend's employee, but there may be an issue renting to her as she owns a pitbull and my insurance company may not cover the house with a pitbull on site).

I'm interested to hear your thoughts.

Thanks!

BTW - We're located in Sacramento, CA.

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Darren Budahn
Investor · Milwaukee, WI · Member since 2014 · 811 posts · 420 votes
11y
Just deny her for the eviction and lying about it and don't even get into the legality of the service animal.
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  • Darren Budahn
    Investor · Milwaukee, WI · Member since 2014 · 811 posts · 420 votes
    11y
    Well there's nothing legally holding you back from calling them and telling them the rent will be higher, although some or all of them may not want the place at the higher rent. You can ask for whatever rent you want but you will only get what the market will bear. I would check some ads on the internet to see what market rent is for your area and price accordingly based on size, condition, amenities, etc.
    1Reply
  • Jesse Gebauer
    OP
    Sacramento, CA · Member since 2015 · 12 posts · 0 votes
    11y

    Make that 14 inquiries...

    0Reply
  • David Schach
    San Francisco, CA · Member since 2010 · 65 posts · 39 votes
    11y

    never rent to pitbull owners. and second, you have no obligation to rent to anyone. just pull the ad down, ignore the emails. repost at your new higher rate. 

    3Reply
  • Jesse Gebauer
    OP
    Sacramento, CA · Member since 2015 · 12 posts · 0 votes
    11y
    Originally posted by @Darren Budahn:
    Well there's nothing legally holding you back from calling them and telling them the rent will be higher, although some or all of them may not want the place at the higher rent. You can ask for whatever rent you want but you will only get what the market will bear. I would check some ads on the internet to see what market rent is for your area and price accordingly based on size, condition, amenities, etc.

     Well, that's what we did - our asking price is right at the asking price of others in the area for the size and bedrooms.  But all this interest tells me we could go higher - sure there would be less interest, but it would really be nice not having to put money on top of the rent every month.

    0Reply
  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    11y

    @Jesse Gebauer, rent isn't controlled by how much you owe on the house. It is controlled by what the market will allow. Did you do any research into current market rates before you advertised?

    I would think that as long as you haven't signed anything with anyone, you could raise the asking rent. I wouldn't employ this technique more than once - do some research into the going rate for comparable rentals and then post the property again with the appropriate market-rate.

    As for denying the dog, make sure it isn't a service animal. Denying a service animal can lead to huge headaches and legal problems. 

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    2Reply
  • Jesse Gebauer
    OP
    Sacramento, CA · Member since 2015 · 12 posts · 0 votes
    11y
    Originally posted by @Mindy Jensen:

    @Jesse Gebauer, rent isn't controlled by how much you owe on the house. It is controlled by what the market will allow. Did you do any research into current market rates before you advertised?

    I would think that as long as you haven't signed anything with anyone, you could raise the asking rent. I wouldn't employ this technique more than once - do some research into the going rate for comparable rentals and then post the property again with the appropriate market-rate.

    As for denying the dog, make sure it isn't a service animal. Denying a service animal can lead to huge headaches and legal problems. 

     It is supposedly a service animal, however, I read some place that if I can't secure insurance on the house, that is sufficient grounds to deny the application even if it is a service dog.  Is this not true?  

    In any event, my wife and I are on the fence with that particular application, as she lied on her application about not having any evictions, and her boyfriend does not have sufficient credit.  Those are enough grounds for us to deny the application as it is.

    0Reply
  • Nicholas Crum
    Property Manager · Jupiter, FL · Member since 2015 · 76 posts · 25 votes
    11y

    I would personally pull the ad and put what your mortgage is. Explain in the ad WHY it is worth more than the comparable market rents in the area. If you get no response, slowly lower it. You never want to leave money on the table.

    As for the pet, @Mindy Jensen , is absolutely correct. You can not charge rent for a service animal or companion animal.

    0Reply
  • Darren Budahn
    Investor · Milwaukee, WI · Member since 2014 · 811 posts · 420 votes
    11y
    Just deny her for the eviction and lying about it and don't even get into the legality of the service animal.
    6Reply
  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    11y

    @Jesse Gebauer, both of those other reasons are enough to deny the application. The eviction one is the one I would use, as she cannot deny it and you don't have to accept applicants with evictions. Don't even mention the animal. You do have to make exceptions that do not cause you undue hardship. Finding a new insurance carrier, which may cost your more, would be an undue hardship.

    But if there are other reasons to deny, I would use those. If she lies on the application, you can expect problems throughout your entire relationship with her. I can guarantee that.

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    2Reply
  • Jesse Gebauer
    OP
    Sacramento, CA · Member since 2015 · 12 posts · 0 votes
    11y

    What about replying to all the inquiries, stating the increase in rent of $200, but offering a 2 year lease if they want it without a rent increase in those 2 years?  Would that be an acceptable "trade-off" to renters?

    0Reply
  • Jesse Gebauer
    OP
    Sacramento, CA · Member since 2015 · 12 posts · 0 votes
    11y

    Also, the master bathroom is in the middle of a remodel which will be done in a week or so - so that's a pretty significant upgrade over other units in the area.

    Combine that with new flooring in the front room, and there's definitely a case to an increase.  I'm not sure we can get $200 more, but I'd really like to.

    0Reply
  • Allison OBrien
    Levittown, PA · Member since 2015 · 36 posts · 5 votes
    11y
    You just basically need to do the market research to see if the property comps out at that higher price. A ton of applicants does not always mean the price is too low, it could also mean the market is scarce. That too, plays in your favor from a pricing standpoint as well. Your property then has the potential to be a hot commodity. Good luck and keep us posted!
    0Reply
  • Tyson Luthy
    Property Manager · Idaho Falls, ID · Member since 2015 · 147 posts · 83 votes
    11y

    You'll want to be sure to get the ad right before you start accepting applications. When someone pays an application fee, THEN finds out that the rent is higher - people get mad.

    We always start the price higher and begin marketing the property before the current tenants have even left. This helps us get a feel for demand before the property even becomes vacant.

    Then, we monitor activity and make adjustments. There are a lot of things that can affect getting a unit filled. We always look at 3 things:

    • Price - too high? too low?
    • Presentation - good clean properties attract good clean people
    • Exposure - are people seeing the ad? etc.

    It sounds like from your situation that upping the rent may be a possibility. But if the unit is already vacant, you will want to weigh out the cost of a prolonged vacancy vs the increase in rent.

    Good luck!

    2Reply
  • Kimberly T.
    Investor · Colorado Springs CO · Member since 2014 · 535 posts · 253 votes
    11y

    I don't mean to burst your bubble, but it's totally normal to get a bunch of interest within the first few days of listing a unit for rent. Think about it... there have been lots of people out there looking for a place to rent, and when they see a new listing, they all call about it.  In a week from now, all the people who'd been looking for a while will have called, and at that point, you'll just be getting calls from people who have just started looking and came across your ad, which obviously won't be at the same rate as the number of people who'd already all been looking and called you within the first few days.

    Also, a lot of the people who are calling you will be the desperate type who will take anything they can get, because they've been rejected everywhere else due to evictions, bad credit, low income, etc. (that's why they're all still looking and calling you so quickly).  Not all of them, but a good chunk of them will be this way.  You don't want to rent to those ones.  You'll need to weed through all these people to see if any of them are worth renting to.

    Here's an example.  We rented one of our 2 bed units last August.  We got literally dozens of phone calls within the first few days of listing it (listed on a Friday I think, so this included a weekend).  Out of those dozens of phone calls, we had probably about 20 or so showings over the weekend.  Out of those 20-25 showings, we got about 8 applications.  Out of those 8 applications, only 2 or 3 were worth checking out and possibly renting to.  We did end up renting to one of those applicants and they've been great so far, so I'm not saying to disregard all these calls as desperate losers or anything, I'm just saying to keep things in perspective and know how this process works.

    Personally, we like to keep our rents a little below market, for exactly this reason.  Offering a good deal gives us a bigger response and allows us to pick a great tenant out of a pool of applicants, rather than getting only a few applicants and having to pick the least crummy one.

    As for the one with the pit bull and eviction and lie on the app, that one should be obvious as a no go.

    5Reply
  • Rob Beland
    Investor · Leominster, MA · Member since 2011 · 1k+ posts · 589 votes
    11y

    Im with @Kimberly T.. Dont focus on the number of responses. Half of them could very will be disqualified. Check your market. Id rather rent just under the market rate to a solid tenant than squeeze an extra $100 out of somebody that really can't afford it anyways. Just look at all the different advice you're getting on this post @Jesse Gebauer. Focus on the quality not the quantity. 

    0Reply
  • Jesse Gebauer
    OP
    Sacramento, CA · Member since 2015 · 12 posts · 0 votes
    11y

    All valid points.  I suppose we should be happy with the interest and not try and get more money.  I want to be a landlord everyone wants, so coming in under market a little is OK with me, but my wife and I will be just squeeking by every month with having to put $370/mo on top of the rent.

    My wife and I will review your comments tonight and decide if we increase it $100, $200, or not at all (I'm leaning towards not at all).  I GREATLY appreciate all your responses!

    0Reply
  • Fay Chen
    Investor · Bothell, WA · Member since 2015 · 214 posts · 104 votes
    11y

    Check out padmapper.com I used the site to find rental properties. It pulls from multiple sources. It's great for SoCal. So maybe it'll give you a more realistic market rent for your property.

    0Reply
  • Frank Woodin
    Investor · Crystal Lake, IL · Member since 2014 · 64 posts · 17 votes
    11y

    The other thing you have to consider is that if you raise the rent by $200.00 and then don't rent it out and your rent is $2400.00 you will have lost all your increased profit ($200.00 X 12 months) in one more month of the property being vacant.  I once tried to get an extra $100.00 of rent on a place and should have just lowered it down to what I thought would be a good number based on the market and would have netted out an extra $200.00 over the year (the rent was $1000.00 at the time).  The key is see what the market says and I agree with posts previously about a good number of the people who call or reply won't be up to the standards you will want to rent at.

    0Reply
  • Josiah Cooper
    Real Estate Agent · Huntsville, AL · Member since 2015 · 60 posts · 17 votes
    11y

    Not sure if there are any laws against this but you could also let each inquiry know that there has been a lot of interest in the property and that they could make a "bid" for the highest amount of rent they would be willing to pay and go from there..

    2Reply
  • Account Closed
    Investor · Honolulu, HI · Member since 2013 · 3k+ posts · 1k+ votes
    11y

    Elasticity of demand!  A $25 increase could result in 0 interest.  Pick the good applicant.  The best candidate at the highest price will usually be the neediest tenant and they will jump ship to greener grass at the first opportunity.

    1Reply
  • Bob H.
    Rental Property Investor · Cedar Park, TX · Member since 2014 · 414 posts · 272 votes
    11y

    Don't feel obligated to stick to the first rent you advertised. Big apartment complexes, like airlines, hotels and car rental companies, change rents every day based on demand forecasts. 

    As always, as others have suggested, know your market and weigh the reward of charging rent near the high end of the range against the risk of vacancy if you charge to much.

    0Reply
  • Steve B.
    Engineer · Portland, OR · Member since 2014 · 1k+ posts · 1k+ votes
    11y
    for goodness sakes man, pull the ad until you figure out WTF you are even doing. You appear to have no idea what you are doing and this is a huge financial decision.
    2Reply
  • Jesse Gebauer
    OP
    Sacramento, CA · Member since 2015 · 12 posts · 0 votes
    11y

    Here are the comps in our area (not many): https://sacramento.craigslist.org/search/apa?bedrooms=3&bathrooms=2&housing_type=6&query=natomas

    And here is our place: https://sacramento.craigslist.org/apa/5068356331.html

    Wife and I are leaning towards staying at 1600. If anything moving to 1700.

    And Steve, you're absolutely right. If I knew what I was doing, I wouldn't be here asking for advice :) 

    0Reply
  • Steve B.
    Engineer · Portland, OR · Member since 2014 · 1k+ posts · 1k+ votes
    11y
    fair enough Jesse but my advice, while brique it wasn't facetious. take down your ad and don't accept applications until you understand the basic rental process and not making frenetic, illogical, uninformed, emotional decisions as you are currently
    0Reply
  • Jesse Gebauer
    OP
    Sacramento, CA · Member since 2015 · 12 posts · 0 votes
    11y
    Originally posted by @Steve B.:
    fair enough Jesse but my advice, while brique it wasn't facetious. take down your ad and don't accept applications until you understand the basic rental process and not making frenetic, illogical, uninformed, emotional decisions as you are currently

     Meh, I'm not.  We're staying with the original advertised amount.

    Thanks for your concern, though.

    0Reply
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