Rent

6 Replies

Hello biggerpockets! I was discussing something yesterday and it turned into a debate.  So i want to see what you all think.

If you are listing a 2br 2ba house to rent and you know in your marketplace that it can rent for $1,200. Would you list it at below market in hopes that a tenant will stay long term to eliminate vacancies? 

I'd rather get the market rate for the property and then not raise the rent in hopes of keeping a good tenant.
Originally posted by @Vaundel Gassett :

Hello biggerpockets! I was discussing something yesterday and it turned into a debate.  So i want to see what you all think.

If you are listing a 2br 2ba house to rent and you know in your marketplace that it can rent for $1,200. Would you list it at below market in hopes that a tenant will stay long term to eliminate vacancies? 

"Hope" is not a good business practice.

If I knew that a unit will rent for $1200 on a 1yr lease I would list it for that price. However, If I wanted the tenant to stay long term I would give them an incentive to stay longer. That incentive would be $1150 for a 2 year lease. 

See what I did there?

Both have very good points! Thanks for the feedback. 

Also. When looking for tenants or accepting applications. As the rent price drops. Usually the quality of tenant drops too. It's an unfortunate stereotype but one that I've found true nearly 100% of the time. 

It depends is what I would say. If the market is hot, I would rent at market, if it is saturated I would probably go a hair lower to get a better crop of applicants. But I like to be positioned stronger against my competition so that the potential tenant knows this is the best thing going. Other people are willing to wait and have more money, which is not wrong, just different as a philosophy.

I would list it at market. If you list it lower you will get more undesirable applicants and will have to screen and reject them. Whereas if you list at market there will be less of a chance of someone taking advantage of the situation and you will get more money and have more piece of mind.