Where do you set your rents compared to market?

Question

Hey all.  I'm new here but I've been reading your posts and learned a lot. So my parents and I have been buying and renting out houses for about three years.  I like to set my rental prices in the middle of the market, but they like to set their rents lower and sometimes it's the cheapest in the area on craigslist.  What are your experiences?  Do you think setting prices in the middle of the road is better than cutting the rent to the bottom to rent it out as fast as possible?  In our experience it actually didn't make too much of a difference on vacancies.  Sometimes you just get lucky and get someone that is willing to pay a little more. Thanks for reading!

Paul Salmela · Answer

I agree with Dave.  I price my properties at the high end of the market.   If they say it’s a little high I have been known to come down a bit if they seem like a great fit.  Also, I tell all my prospective tenants that I care about this property and will take care of any issues right away.

Dave M. · Answer

Hi Xin L. if you price at the bottom of the market that's what you're likely to attract. Higher quality tenants may not consider your property, assuming there is a good reason it is priced below market.

Pricing at or above market gives you several advantages:
1. You may attract an above average tenant who maintains the property
2. If not, at least you have received more of a cushion to coverage damages in excess of deposit
3. Flexibility to come down on pricing (really hard to go up!)

I think you answered your own question though, since you said it didn't make too much of a difference in vacancy. Offer a good product at a fair price and most people will gladly pay.