Rent Price Set by Tenants Bidding

6 Replies

I'm curious what everyone thinks about allowing prospective tenants to "bid" on a property's rent. Logistically, I'm thinking that I could show my house for 1-2 weeks after it becomes vacant, and I would tell everyone interested to submit a free application with their best offer. I could then evaluate the applications and try to find the best tenant (most stability, high salary, no criminal activity,...) with the highest bid, and then rent it to them. If none of the applicants meet my minimum rent amount, I could just repeat the process. 

What are your thoughts? 

@Thomas Garza

Not a very good idea, especially this time a year. Set the rent at market rate and go from there.

Let's play advocate for a moment. 

Assume you have a 4plex and three rent for $1500/mo. You are taking bids on the 4th. All you can get is $1400. The other three find out you rented it for $1400 and want their rent lowered. Would you do it?

You go to the gas station and instead of listing the price, they ask you to bid for the gas, would you? How about for airline tickets? How about for food?

As @Michael Craig said. Set it at the market and move on - not a good idea. 

kudos for thinking creatively but have to agree with the above. Think about how many times prospects don't follow through with visits, applicationss, etc. and you are trying to coordinate 4 bidders. 

And you have two very different parts of this transaction, the money and their qualifications. Pretty much can guarantee the high bidder is the least qualified. Now what do you do?

If I were a tenant, I wouldn't waste my time. I need to secure a place. I wouldn't want to wait two weeks for you to show it to everyone then wait to see if my bid were high enough or have you come back and tell me I was close and you'll rent to me if I increase my bid another $50.

Also, what if the highest bidder is the worst applicant? Are you willing to overlook the excellent applicant that offered $1400 in order to rent to the mediocre applicant that barely met your standards but is willing to bid an extra $50 a month? That extra $50 a month could cost you much, much more by dealing with a crap Tenant.

Terrible idea. Pat yourself on the back for thinking outside the box, then put this idea down and don't go back to it.

@Nathan G.

I’d agree with Nathan on this for sure . The highest bidder may very well be the worst choice for a tenant . It’s not all about the money ! You get an idiot in there it can make your life a living hell . Set a price screen good and stick with what works . Don’t try to reinvent the wheel bro , this isn’t rocket surgery

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