Am I charging too much?

General Landlording & Rental Properties
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Am I charging too much?

Nadir M.
Property Manager · Westminster, CO · Member since 2018 · 486 posts · 110 votes

Recently closed on a house and just listed for rent. Been listed for rent for four days now and only had one application. Applicant credit score too low so decided to pass. We are approaching the Winter season and it’s obv Thanksgiving week so I figured it’d be slow trying to find a tenant. Current Zillow rent price is $1550 and I listed for $1600. House it a bit dated but in a great neighborhood. One bathroom doesn’t have a shower, just a tub, but master bathroom has a full bathroom. I’ve listed the house on Zillow, Cozy.co, And Turbotenant. Since I’ve listed on these three sites, my property gets advertised on many different sites by default. My question is, do I stay a bit more patient at $1600 and wait until week after Thanksgiving is over then reduce price? I don’t like the idea of placing a for rent sign outside house or listing on Craigslist. Thoughts on both?

So do I keep price, adjust price, advertise house differently...any help is appreciated

Thank you,

1Reply
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Mary M.
Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
5y

its been listed for 4 days?   that is nothing - especially this time of year.  However, Lowering price (or raising it ) can change the traffic.    Did you look at other similar rentals and see what they are renting for? 

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  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    5y

    its been listed for 4 days?   that is nothing - especially this time of year.  However, Lowering price (or raising it ) can change the traffic.    Did you look at other similar rentals and see what they are renting for? 

    4Reply
  • Jennifer Z.Pro Member
    Rental Property Investor · Brookings, OR · Member since 2015 · 68 posts · 28 votes
    5y

    I do not know what market you are in, but consider how the renters in your market find a place. Do they use craigslist primarily or a Facebook local marketplace? Advertise where the potential tenants you want hang out.

    In addition, does your area have military you could connect with or traveling medical professionals. Think about the type of tenant you prefer and seek them out.

    For the rental price, make sure you have an accurate price based on listings not just Zillow estimate. And objectively look at your property with all the advantages and disadvantages of the unit and location and rental pool. It can be a challenge to see your property as is.

    1Reply
  • Nadir M.
    OP
    Property Manager · Westminster, CO · Member since 2018 · 486 posts · 110 votes
    5y

    @Mary M. Yes, one property was listed for $1900 but was bigger and more upgraded. Another listed for $1695 bit more upgraded but one less bath.

    0Reply
  • Nadir M.
    OP
    Property Manager · Westminster, CO · Member since 2018 · 486 posts · 110 votes
    5y

    @Jennifer Z. How do I know what kind of formats are used, In a specific market, by applicants to find their next residence?

    0Reply
  • Jaquetta T Ragland
    Real Estate Agent · Winston Salem, NC · Member since 2014 · 486 posts · 303 votes
    5y

    @Nadir M. It may be the holidays. I would wait before changing the price. You may want to try listing it in local Facebook marketplace groups.

    3Reply
  • Kenneth GarrettPro Member
    Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
    5y

    @Nadir M.

    I don’t use Craigslist or Facebook market place to rent my units.  I stick with Zillow which links to Trulia and Hot Pads.  I disregard the rent zestimate and use other comparable units in my area to determine market rent.  I find rentometer is a big help.  I try to make sure my unit is updated to outshine the competition.  4 days plus the holiday; I would give it another week at least.  This time of year is definitely more difficult.  If the competition has been on the market for 30 days plus and they are finished nicer then yours you may need to adjust the price or provide an incentive.  Remember it’s almost winter and we are in a pandemic.  Those are not things in your favor.  I always debate at this time of year whether to lower the rent $100 or stick where I’m at.  If it stays on the market for another 30 days then the $100 was a wash assuming I could have found a good tenant quicker.

    1Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    5y

    Four days isn't that long given the current situation, time of year and time of month.  Also look at the photos you've posted to see what it looks like to potential renters searching for places online.

    0Reply
  • Nadir M.
    OP
    Property Manager · Westminster, CO · Member since 2018 · 486 posts · 110 votes
    5y

    @Jaquetta Turner going to try to list on Nextdoor ... I think that’s the same as Facebook Marketplace

    1Reply
  • Nadir M.
    OP
    Property Manager · Westminster, CO · Member since 2018 · 486 posts · 110 votes
    5y

    @Kenneth Garrett i use Rentometer as well. I feel like that site underestimates rent tbh but still a good tool. Some competitors have been sitting on market for 30+ days. This is my first time listing a house during this time of year. The other properties I own sat for about two weeks and that was during the months or March and April. I’m going to see how next week goes and then make a decision. You’re absolutely right, winter, holiday, covid...all playing against me. I live out-of-state so may try to make some upgrades as it sits on market.

    0Reply
  • Kenneth GarrettPro Member
    Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
    5y

    @Nadir M.

    Best of luck to you. Great pictures with your marketing is a key component as well. You definitely want to improve your property better then your competition, without over improving. I understand how frustrating it can be. My SFR usually are rented in 7-10 days.

    1Reply
  • Nadir M.
    OP
    Property Manager · Westminster, CO · Member since 2018 · 486 posts · 110 votes
    5y

    @Kenneth Garrett thank you Kenneth

    0Reply
  • Bud Gaffney
    Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    5y
    Originally posted by @Nadir M.:

    Recently closed on a house and just listed for rent. Been listed for rent for four days now and only had one application. Applicant credit score too low so decided to pass. We are approaching the Winter season and it’s obv Thanksgiving week so I figured it’d be slow trying to find a tenant. Current Zillow rent price is $1550 and I listed for $1600. House it a bit dated but in a great neighborhood. One bathroom doesn’t have a shower, just a tub, but master bathroom has a full bathroom. I’ve listed the house on Zillow, Cozy.co, And Turbotenant. Since I’ve listed on these three sites, my property gets advertised on many different sites by default. My question is, do I stay a bit more patient at $1600 and wait until week after Thanksgiving is over then reduce price? I don’t like the idea of placing a for rent sign outside house or listing on Craigslist. Thoughts on both?

    So do I keep price, adjust price, advertise house differently...any help is appreciated

    Thank you,

    Hi Nadir,

    With all due respect to you, Zillow is very inaccurate, especially during this pandemic. A better resource to check out rental comps is "Rentometer". You can use different criteria to get really close to the current rental market. Give it a try :)

    If I was you, I would lower that rent a bit. I hope this is helps.

    1Reply
  • Nadir M.
    OP
    Property Manager · Westminster, CO · Member since 2018 · 486 posts · 110 votes
    5y

    @Bud Gaffney

    Hi Bud,

    So I used Rentometer..I narrowed my search to houses that are or were on rent for the past 6 months. I was able to get the rent range from $1300-$1585. The house is located in such a great neighborhood. Two car garage, 3 baths, nice deck, laundry in unit, and close to stores, laundry mats, fast food and dine in restaurants and only half-mile from interstate. I’ve had one tenant apply as well but they had a very low credit score and problems with collections agency.

    1Reply
  • Bud Gaffney
    Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    5y

    Hi Nadir, 

    Stay far away from that tenant. (Obviously) I would love the rent to $1,575 :) You'd be surprised how that small change will make a big difference. Good luck!

    0Reply
  • Bud Gaffney
    Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    5y

    Move* not Love haha

    0Reply
  • Nadir M.
    OP
    Property Manager · Westminster, CO · Member since 2018 · 486 posts · 110 votes
    5y

    @Bud Gaffney

    I was thinking of reducing to $1550 after next week but $1575 makes me more excited and more willing to change sooner than later.

    0Reply
  • Bud Gaffney
    Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    5y

    Please keep me posted!

    1Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    5y
    Originally posted by @Nadir M.:

    Recently closed on a house and just listed for rent. Been listed for rent for four days now and only had one application. 

    You may not be asking too much overall as mentioned but for the time of year.  I agree with odd pricing it. Thinking of my portfolio, I have a lot of rents that end in $95. 

    So what was your purchase price on this house? How did you find it?  Did it require a lot of work to get rent ready? 

    0Reply
  • Nadir M.
    OP
    Property Manager · Westminster, CO · Member since 2018 · 486 posts · 110 votes
    5y

    @Steve Vaughan

    Purchase price $175,300. 20% down conventional. Monthly payment $1085. Not a bad idea listening for $1595. Not the first time I’m hearing about pricing home ending in 95, 75, or even 50.

    1Reply
  • Nadir M.
    OP
    Property Manager · Westminster, CO · Member since 2018 · 486 posts · 110 votes
    5y

    @Steve Vaughan

    I put about a grand into it. I wanted to do more but had to head back home...since it’s out of state. Definitely rent ready. Found it on Zillow. Been sitting on market for more than 7 days so I got lucky in that regard.

    0Reply
  • Bill P.
    Investor | Syndicator | Instructor · Cincinnati, OH · Member since 2008 · 435 posts · 198 votes
    5y

    @Nadir M. You've had some good comments here. I just want to that pricing your rental is much like retail. You'll catch more renter's eyes by listing at 1599 vs. 1600 just like real estate agents would rather list for 199900 vs 200000. Intellectually it doesn't make a lot of difference but emotionally it is a world apart. Also, consider a professionally looking FOR RENT sign for the yard. Advertise where people passing by might notice as they might like to live there. Good luck with your investing future.

    0Reply
  • Brad HammondBusiness Member
    Real Estate Agent · Portland, OR · Member since 2016 · 1k+ posts · 605 votes
    5y

    I've always found that I always get less response towards the end of the month.  I bet you will get more traction in early December.  As far as the price goes, it depends on how fast you want to rent it.  It is better to drop it by $50 if you can rent it 2 weeks sooner.  

    0Reply
  • Nadir M.
    OP
    Property Manager · Westminster, CO · Member since 2018 · 486 posts · 110 votes
    5y

    @Bill P. Thank you. For Rent signs scare me because it’s stating that house is sitting vacant especially if sign is posted for a while. Maybe I shouldn’t care too much about that since it is in a decent neighborhood

    0Reply
  • Julius Chinn
    Member since 2020 · 104 posts · 54 votes
    5y

    $1,599 vs $1,600 you honestly think that makes a difference.   You not selling  a YO-YO.

    $1,399 vs $1,600 now you will catch eyeballs.

    You said competition has been sitting on market longer than 30 days,  thats the key.

    Your way i see $3,000 lost income.   Lower price significantly you have a chance to get a qualified renter.

    0Reply
  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    5y

    @Nadir M. 

    I will suggest you drop the price to $1550.

    Advertise on any free platforms, Put a For Rent sign in the yard as this will attract people, family, and friends that are already in the area looking to move to a new house.

    Thank you.

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