Advertised rent too low

38 Replies

Apparently I advertised my rental too low because I have 80 people interested in 2 days.    I advertised $1700 but I'm at least $50 low for sure, maybe $100 or even $200.  How should I approach this from a legal standpoint?  Can I just update my add (zillow) with the higher price?  Is it ok to have a bidding war for a rental?  Good problem to have, but I'm not sure of the best way to inform everyone that I'm low and need to increase, or if I even need to.  Mostly legal concerns, don't want to be surprised by a "professional" tenant!  Thx for your input.

Interesting question.  I would delete the ad and repost. 

Did you respond to anyone? If so maybe you will need a quick call to your atty. 

@Jeff Caravalho Out of those 80 have you vetted them at all for their minimum qualifications and do they meet yours?

If only a quarter of them are what you consider qualified to rent the apartment your rent may not be as far off as you think. 

@Jeff Caravalho you are under no legal obligation to rent to anyone. If someone has submitted an application, I would honor your advertised rate to that individual but not accept applications from anyone else. If the individual fails to meet your criteria, then you can raise the rent and advertise again.

If nobody has applied, delete the ad and post it again with the new criteria. If you have 80 people looking, there's obviously some demand. Try bumping it $200 and see how you do. If not enough interest, you can always back down again.

@Jeff Caravalho I had this problem too (good problem to have) on a recent rental I listed on FB marketplace!

I put out an Ad to get some 'feelers' and overnight got 70+ messages. I decided to take the Ad down, buy a modem, and call up Comcast for a basic internet. 

I added some value to justify the rent increase & it worked. It's a Duplex so I was able to use the Modem & internet for both units and also added some income to the property. 

My advice would be to take the Ad down and maybe find a way to justify a $100 - $200 rent increase! 

@Jeff Caravalho

Did you take applications and verbally agreed to rent the property to one of them?

Are you a licensed Property Manager? Are you a licensed real estate agent working under a broker? Better call your broker right now and the firm's attorney on Monday.

You should know the rents in the neighborhood before you even place an ad.

If you had applicants then you may need to honor the listed price.

It also could be the time of year students are looking and that this is jusT normal and a price increase may not be warranted - that is a risk you have to think about

Having the placed advertised under market is not a bad thing. You now have 80 people who are calling about the house.  Out of that number maybe 5-7 will apply and from there you can see who actually qualifies based on your criteria. 

Geez must be nice ! I’ve got maybe a dozen inquiries over a weeks time on a vacancy I have , but of coarse it’s bitter cold here and worst time for us north eastern folks 

Bad time of year to be getting greedy. Especially over 50 bucks/month. If you aren’t sure it’s 50 or 200 then sounds like there may be even more things that you don’t know about landlording which will then take even more of your time to figure out, which may then draw out a vacancy even more.

If you already have applicants I would honor the original rent.

Remember you can always raise rents later.

If you repost with a higher rent and then it takes forever to find a highly qualified tenant you’ll be kicking yourself. I always try to ask myself “am I being greedy?” When I look back at mistakes I can usually say that I was being greedy.

@Jeff Caravalho Multiple offers are common in my market where I have single family properties. In a bidding situation, tenants will offer more money just like with a purchase. There is nothing stopping you from changing the advertised price. It happens (albeit rarely) with properties for sale.

Wow, thanks for the response everyone! really appreciate your input.  @Michael Noto Yes, I bet only 20% of them will be good to go, which is pretty good in the middle of winter...@Nathan G. no applications have been filled out yet.    @Matthew John good plan, one of our rooms has no closet, we were going to put in an armoire and call it good, but contractor buddy said he had to put in a real closet on a job to make legit bedroom.  So for now thinking of calling it a 2/2 with bonus room (office or game room or bedroom if desired), leave rent the same for now and require renters insurance, then at the end of a 6 month lease , put in a closet, and raise the rent after that.  Any thoughts on that?  Can I change the ad to say 2 beds and bonus instead of 3 beds?  Or should I just pull the ad and make another?

@Oberlander No,No, No and yes on the attorney.  Using Rentometer and we are  about 100 low on that, but not sure of how it would go in the middle of winter, so didn't want to be greedy, right @Philip Willis ?.   But yes I should have a better feel for the market - sheesh!  We are putting it on a 6 month lease and tenant would go in knowing rent will go up in 6 months, on a new lease @Mary Mitchell no apps out yet, some students but not too much.  Definitely weighing risk in winter..@Frank Wong . Yes I'm thinking 80-20 rule on that one...@Dennis M. That's funny, yeah you guys would laugh at the winters out here!

@David Oberlander (sorry input name wrong)  No, No, No and yes on attorney.  Using Rentometer and we are about 100 low but didn't want to get greedy in winter.  But yes need to have better feel for this market, thx

People, he just want to know the legal implications of rising the rent from the already posted add given a lot of offers, and this is a very good question.  Every situation is different, but the question is very good. 

@Jeff Caravalho Interested to know if you already charged application fees and ran prospective tenants credit scores. 

Originally posted by @Jeff Caravalho :

@Oberlander No,No, No and yes on the attorney.  Using Rentometer and we are  about 100 low on that, but not sure of how it would go in the middle of winter, so didn't want to be greedy, right @Philip Willis ?.   But yes I should have a better feel for the market - sheesh!  We are putting it on a 6 month lease and tenant would go in knowing rent will go up in 6 months, on a new lease @Mary Mitchell no apps out yet, some students but not too much.  Definitely weighing risk in winter..@Frank Wong . Yes I'm thinking 80-20 rule on that one...@Dennis M. That's funny, yeah you guys would laugh at the winters out here!

 I would not trust Rentometer.  It gives you a better picture of what you "should" be renting, but it comes down to amenities, how good your property looks vs the competition, etc.  

I wouldn't do 6 month leases either.  Anyone who wants to rent for less than 6 month better find a short term deal.  The cost for having the property vacant for two months in a year is outstanding, unless you have 15-20% projected vacancy in your property.  

@Josue Vargas yes just tryin to get some info. from the pros.  no apps out no credit checks, etc.  Good point on amenities, no garage or storage outside, looks good but its an old house, floor plan not the best...The main reason for the 6 month lease is to get it on the summer schedule then go with the 1 year lease from then on.

Originally posted by @Jeff Caravalho :

@Josue Vargas yes just tryin to get some info. from the pros.  no apps out no credit checks, etc.  Good point on amenities, no garage or storage outside, looks good but its an old house, floor plan not the best...The main reason for the 6 month lease is to get it on the summer schedule then go with the 1 year lease from then on.

 NO!  You have a lease for 6 months, then what?  Month-to month?  By law, you just can't "fire" a tenant.  You have to give them notices, etc.  Are you going to loose your first tenant just because your rental is available now and you want to run from May-May?  NO!  Get a 1 year lease, then month-to-month!  Every time a tenant moves out = $$$$.  People also break leases, I wouldn't wait or plan for the right  months.  With time, your property will get into the sweet high demand spot.  Better rented now than not! 

You can do a 6-month lease for higher price, then drop some rent if he/she wants to stay and renew the contract at summer (high demand --  for a year!)  

Do you really want to be "that guy"? The landlord who posts ads in bad faith?  Mr "Bait & Switch"?

 I would look at the 80 responses you got & see who is a real contender (skip anyone who claims to be out of the country, but who promise to "send a check immediately" LOL). Like others have pointed out, if you end up with 8 actual solid rent-worthy prospects you'll be doing well.

What if out of those 80 e-mails you screen for EXCELLENT prospects with income of over $6k/mos?  You explain that the $1800 is only for the next 6 months to get it on the local University schedule,and that your plan is to raise it to the full fair market value of $2000 at that time. If they turn out to be absolutely sterling, top quality tenants and you allow them the option to renew in 6 months it will be only $1900, They get $100 discount, you get an easy $100 raise, a "mid lease raise" and zero turn over for an 18 month length of stay -- win/win/win. Alternately you get tenants that move in 6 months & you raise the rent to the the full fair market value, which you have by then carefully researched for max profit/min vacancy. 

BTW, something to think about --if you relist immediately at a higher rate prospective renters WILL recognize the pics from your previous post, & you may lose out on GOOD tenants who figure you are a sleazy scammer. As others have pointed out, you are in CA, & could also end up in some legal hot water. 

Also, posted only on Zillow? Not Craigslist as well? Postlets?  I would look a those as well as scoping out some property management company sites in order to gauge your local market.  IMHO Rentometer & rent Zestimates seem to be about as accurate as throwing a dart at a board blindfolded - it'll get you somewhere in the very general vicinity, but it's nowhere near accurate.

@Josue Vargas   I don't want to fire the tenant, but if he's not adhering to the lease he will be fired by my lawyer (figure of speech), I want to renew the lease (with same tenant) during the summer months so if it doesn't work out after that (ie. he's not adhering to the lease), I can "not" renew the lease (ie. you're fired) during a summer month not a winter one, and I'll be on the summer cycle for the new tenant (with a one year lease from then on).   This is not for when the tenant breaks a lease, this is for if I decide not to renew it, and if I can choose when to do that, I choose summer.

@Jeff Caravalho Have you not looked up the comps in your area before posting on Zillow? I use Hotpads and my zip to see what the current market is. You can zoom into your street to see what others are renting for. I have increased the rent on my advertising after posting, it’s your property and you decide how much to rent for no Leah am issues. Reset the clock. On Zillow it also shows how much comparable houses rent for in your market. Go get the best rent you can get, why be the lowest?

You can keep it, but utilize these calls to your advantage. I'd love to have 80 calls.  

Soft screen everyone to find that perfect tenant.  One that has a predictability of staying for multiple years.  Maybe even offer a 2+ year lease.

@Jeff Caravalho

80 inquiries mean nothing. It could be 78 unqualified/uninterested and 2 good candidates. I’d vet the candidates before assuming your advertised rent is too low.

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