Allow ability to suggest a different rent amount?

Question

I'm deciding the rental amount on a unit that's very unique, meaning I can't compare its rental rate to any others in the area, or elsewhere for that matter.

I've done my research on other kind of units in the area and I've made a fair assessment on the rental amount for this one. I might be overpricing it, however. I don't want to scare away potential solid applicants without giving them a chance to let me know if things are far off with the rental amount.

I've read that one should usually not allow potential tenants to suggest a different rental amount but would it make sense in this case, where my basis is based on speculation rather than solid comparisons?

The idea would be to simply ask if they can pay the listed rental amount and if not then ask which rate they'd accept? I'd rather have 10 applicants with everyone saying that they'd pay slightly less, especially if they're standout applicants, rather than getting 0 responses and I'd have no idea of knowing what's wrong. Or even worse, I'd potentially only get responses from shady characters who don't mind being charged slightly higher.

Thanks in advance!

Nik Corbaxhi · Answer

You might have to explain a bit about what is so "unique" about this unit that it makes such a huge difference when compared to market. You have to look at demand vs supply and the types of potential tenants you are renting to. If your unit is unique because it offers something cool but not necessary for normal living, you may have a harder time justifying your price.

I agree with Mike's assessment as far as the price goes. You have to have the lowest number you are comfortable renting the unit for in order to make it work financially, so tag a $50-100 on top of that and see where it goes.

If you don't want to take a risk with timing, as @Mike McCarthy suggested, why don't you just price it at market and get it rented, then the next time you start showing it, you can afford to play around as you will most likely be showing towards the end of the current tenant's term, so no vacancy issues there.

Jónas Tryggvi Stefánsson · Answer

Thanks. An extra month or two might be too extreme but a couple of extra weeks should be worth it.

Mike McCarthy · Answer

id rather set the monthly rent, and see if it rents. If not, drop it $50. The market will help determine the value without getting caught up in tenant’s financial issues.

I think out of principle, I wouldn’t decrease the rent for a prospective tenant who asks. It’s akin to negotiating for milk at the grocery store. Start there, then sets the tone for the whole relationship.

It may take an extra month or two to rent it the first time around, but then you’ll figure out what it’s worth.