When is it time to lower the rent?

Question

Hello BP,

I placed an ad for my rental, we have received 68 emails and a few phone calls expressing interest. My daughter is interested in managing, so we bypassed our PM and following @Brandon Turner management book we have been trying to get a tenant. We've been holding showings 3 times per week. Very few of the prospects show up, we've only had 1 applicant with very challenged credit. We started at $950 following Rentometer but after 2 weeks decided to match the Zillow's $925 suggested rent. We continue to receive emails and calls but no actual applicants. Is our rent still to high? We are using Cozy where they can apply by putting their information and paying for their screening. How long does it really take on average?

Would you please take a look and offer suggestions? I saw another rental in the are that has been listed for 45 days and I fear we will be at that mark soon.

Thank you.

http://www.zillow.com/homedetails/3683-Platina-Par...

Pyrrha Rivers · Answer

@Roy N. Thank you for your advise. You're absolutely right about foregoing $360 - $600 making a lot more sense. I will apply that to my revised ad.

@Jake Oreskovich Thank you for taking the teacher approach. I'm a teacher and know that step by step is a great way to help others learn. I will go and modify my ad and place it on Craigslist. Hopefully we'll have a number of actual applicants to select from.

Thank you both!

Jake Oreskovich · Answer

@Pyrrha Rivers hang in there! I know it can be discouraging when you have a rental on the market for so long. Here's a few ideas from a fellow landlord..... don't use zillow or rentometer for determining your rent. Most tenants do not look for properties on zillow. They go straight to Craigslist because it's free, its easy to use and understand and it's not intimidating. Zillow is an awesome site for landlords, investors, realtors etc.....for a renter, not so much.

Go into craigslist in your town and take 10 rentals of the same size as yours, if you can try to stay in the same area also. Try to stick with private landlord listings as opposed to realtors or management companies as they tend to over inflate their prices. Look at how long they have been listed and don't include any property over two weeks old. Now, take all of these properties and average them, that will give you your price range. Stay away from Rentometer and Zillow for the time being because they are not always accurate because there are too many variables that the data systems cannot comprehend.

Try to take away a few of your pictures. Pick pictures you have that make the property look the biggest (the one with the two closet doors open with no toilet, the kitchen view from the side, stairs going down, hallway & of course the front of the home).  Remove the shower /tub, toilet pic, refrigerator pic etc... Also, put in your ad, call or TEXT! Renters love texting! You will get more tire kickers but I'd rather have more traffic than nobody interacting. Also, take out the minimum credit score of 600. Most people have no idea what their credit score is and they fear the words credit score. You can still require a 600 but don't tell them unless they ask.

I hope I don't come off as a teacher grading a paper but I want you to get that tenant fast! Take your revised ad, put it on Craigslist and sign your lease this afternoon! Just my thoughts......

Roy N. · Answer

@Pyrrha Rivers

If you have had that much initial interest, but no applicants, the rent ask is being perceived as too high for the property. It is therefore time to consider lowering the ask.

Dropping your rent ask below $900 ($875 - $895) would be foregoing $360 - $600 per year, which is less costly than sitting vacant another month.  By being ~5% below the market rent, you will have a much better selection of tenant applicants from which to choose.