Hi All - interesting thought process from rentfax on why charging less for rent will help your bottom line. What do you think about this? Watch youtube link below.
It might make sense in a slow market. In a hot market where there is tremendous demand? Not for me. There is a balance keeping quality tenants, but giving away the farm doesn't make sense. I expect to increase rent income over 11K this year on 9 SFR. Our government doesn't worry about keeping taxes low to keep the masses satisfied!
@John Thedford - Agreed that this may work in a slow market.
@Louise Courville - The economics aren't correct in this video. Every landlord / property manager should have standard minimum requirements for properties. For example, my requirements include:
- Minimum acceptable credit score (differs based on property)
- Criteria from credit report
- Income-to-rent ratio (I always use 3-to-1 as my baseline)
- No evictions
- Any other objective criteria (for example, if a prior landlord mentions too many noise violations, then that's a bad sign)
You want to rent to the tenant who meets your standard criteria. If you are not getting strong enough candidates at your initial asking rent price, then you can drop the price. However, I don't recommend going for a lower price just to get more qualified applicants.
A qualified applicant is a qualified applicant. And, you want the qualified applicant who is going to pay the most, which is reason to have fewer qualified applicants at a higher price.