How Long Would You Let a Finished BRRRR Sit Empty Before Dropping the Rent?

Question

Say the rehab is done and you think the house should rent for $2,000. Two weeks go by. A few showings, no solid applicants.

Then another week. At some point, holding out for that extra $100–$150 a month starts costing more than just filling the place.

How long do you usually wait before cutting the rent? I’d hate to drop it too quickly, but watching a finished house sit empty would probably bother me even more.

Jay Hinrichs · Answer

to me it would depend on RISK of being broken into and stripped..

I tend to hold out for not highest dollar  BEST applicant with 680 FICO or better

which I can do with the locations my very few rentals are in.. But if your in an area were 680 ficos buy homes and dont rent.. then it comes down to price most all the time.

And your right  just work the math  miss one month waiting for 100 bucks a month and U end up renting it for less any way take you long time to make it up.. best to rent it and worry about higher rent when the market allows.. its a soft rental market in many parts of the country right now.

Jimmy Lieu · Answer

Great question, Ali! I usually wouldn’t let it sit too long if I’m getting showings but no solid applications. That’s normally the market telling you something about the price. After about 2–3 weeks, I’d take another look at the comps and consider dropping it $50–$100 rather than waiting another month hoping to get an extra $100–$150. A $2,000 rental sitting vacant for another month costs $2,000, which can take a long time to make back even if you eventually get the higher rent. I’d rather price it correctly, get a good tenant in, and start collecting rent than chase the absolute highest number. Happy to connect and answer any questions you have!

Richard F. · Answer

Your premise is that the rehab is "done". Define "done". What is the product you are offering? Safe, Clean (completely), and fully Functional? Reasonable (for the market) quality finishes and appearance? What about the marketing photos an ad copy? Great composition; clearly tells the story of the "home" in an appealing manner? What are roadblocks to viewing or renting the unit? Difficult or slow scheduling for viewing; excessive cost; emphasis on a score vs. less restrictive criteria (while still ensuring screening will be effective). How effectively did you evaluate the market to determine your asking rent?

If you have high confidence that all of the above are good, then, depending on time of year, local market, and traffic, I would make a reduction initially at 10 days to 2 weeks. You need to pay attention to remarks and objections made while showing the unit, and re-evaluate if you need to make changes to any of the above. There are definitely slow periods, typically from mid October through mid April that are slowest in virtually all LTR markets. This applies even more for higher bedroom counts. Studios and one bedrooms should move pretty well almost anytime, but "families" will not usually "choose" to move during the school year.

Your comment about "no solid applicants" is directly affected by what you are offering, where it is located, and how they are being screened.

Chris Seveney · Answer

First question is the location. We like to get our units rented quickly but more importantly, getting a good tenant in is critical. We preach this to our property managers all the time that they need to do a very good and thorough job when evaluating the tenants.

You mention two weeks, and it went on begining of month, I would not lower it until september-ish as people looking probably need something for september or october and are reviewing options.

How Long Would You Let a Finished BRRRR Sit Empty Before Dropping the Rent?

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