Rental Rates - Too high, Too low?

Question

The property I purchased a few months back (7 unit with a storefront) I'm questioning my rates. Now I've done complete remodels to the units and went on the slightly higher end of things in hoping to get less maintenance calls. Now a 2br in this particular location (3 blocks from downtown and 3 blocks from uptown) with heat included goes for around 600/650 a mo. Now I did rent out my first newly remodeled 2br unit for 675/mo. Heat,running water,hot water, and WiFi is included. I received about 80 contacts within the first 24 hrs with about 25 people who actually came. Rented right away and I was able to pick and choose my tenant. My downfalls of this property (tenant wise) is no off street parking and I do NOT have on site laundry, which I am in the process of trying to setup. Am I charging much too low with this amount of feedback? I have spoke to many (investors, renters, and nonrenters)and I get mixed reaction. I have a philosophy of making the units nicer for longer term tenancy.

Michele Fischer · Answer

I don't know your market at all.  Do most other 2 bedrooms offer parking and laundry hook-ups?  To me those might be a $50/month deduct, if so.  The million dollar question is how much the upgrades are worth, because that is really hard to quantify, and think you are right that it helps get it rented and retain a tenant more than command significantly higher rent.

Given your response, the next time I had a vacancy I would raise rent $25/mo.  That high level of response is a blessing in that you have more qualified folks to choose from, but it is also exhausting.  We can usually find a solid tenant from 10 completed applications.  So raising the price to temper the response makes sense to me.   Also, put as much info in the ad as you can so people will weed themselves out.