We are rookies, who just listed our first rental. Only listed on one site, we had almost 15 people submit an application (with background checks and proof of income), and over 50 request a showing, in 24 hours. My question is about wether or not we should remove the listing and up the price. Is that somehow unethical? Following the 1-2% rules, we would be within those parameters to up the price by 200$, which is what we are considering. Or do we wait a year, and then up the price? Its obviously underpriced, but am I being greedy? I feel some sort of guilt about those who applied (they had to pay a fee). What are your thoughts?!
Supply and demand dictates the market price of a product. Would the $200 price increase still be in line with market rent? If you are going to raise the price, refund the application fees and alert the applicants of your decision to adjust the price upwards. Those who applied may be frustrated at the moving target and may not reapply so keep that in mind. A bird in the hand is worth two in the bush.
There's no telling what could happen a year from now. Go back 15 months and no one knew what we were in store for in terms of the pandemic. If there are people that are still interested at the higher rate, they can reapply.
Each time I list my rental, I get significant internet interests. It's so easy for someone to click the "I'm interested" button, but they are doing that to every property they are remotely interested in. I'd start off with 100 interested people, of that only half would reply, and of that only a couple would actually show up for viewings or move forward, and even most of them didn't qualify as good applications. I think most sites allow them to submit applications as many times as they want for one price. So it can easily look like you have a lot more interest than you actually do, keep that in mind.
Go to rentometer.com and check the rent they suggest for your address. As others have suggested you will be overwhelmed by applicants at this time, and with sites like Zillow they can be BG and credit checked once and re-used as often as they wish. My experience with applicants who have been 'pre screened' by a service has been dismal; you have to get a PM or do it yourself properly. Lastly, ethics is personal you get to decide what works for you. All the best!