Tip #7 Don’t over price your rents!
23 November 2006Easy enough to say, but for some landlords, the greed in squeezing out an extra $50 dollars can be costly!
Tenants know the “true” market value in rents. If you price it jsut $50 dollars over, its amazing how hard it is to get applications.
I’ve been watching a house in my neighborhood for about two months now. Its real nice and its exactly the same floor plan and square footage as the house that I am currently living in. If you remember, I am under contract on new construction and plan to close in January, so I’ve been using the house down the street as a data point to compare. However, I fell off my chair when I found out that they trying to rent it out for $1350 a month! I priced my out at $1050, maybe $1100 on the high end. And sure enough , its been months, and this place is still not rented. It appears that a professional company is advertising. If I was the owner, I would not be happy.
Setting the right price can be a art, however, my investor friends rent their places using rents in the lower range. Why? They want them rented out quickly! If you lower your rent by just $50 a month ($600 a year), it might save you a rent payment because you will find a tenant quicker. Scan craigslist, newspaper ads, and call local rental signs for data points.
I’ve been using craiglist as a feeler to price out the market, and I know my price range is more reasonable than the other house. At that price, the house will sit for months and the owners will just be frustrated. Maybe I’ll make an offer? 
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