How do you prevent your house from sitting empty? The thing I have learned the HARD way is that having an overpriced rental hurts you A LOT. It can cause vacancy to last longer then you expect. As discussed here, you can reduce vacancy by making sure that your rental is at the right price.
As someone who just finished her major moving season and is very active on forums, the question that really needs to be answered seems to be: Does having an overpriced rental really hurt you?
If you are like me then every dollar matters. That means that you want to get EVERY dollar out of the house since that is money towards your “oh shoot” account, your future purchases, or for what ever else you wish to use the surplus money.
Here is the thing, any amount above the ceiling makes a difference. That includes $50-$100.
I had a house that I lowered $50 when I was having trouble getting it rented. It went from getting good interest to getting TREMENDOUS interest. It went from a good house, to a DEAL and people HAD to have it!! That $50 made all the difference. For me that was rented at $1,250, but I know another person who had hers rented at $2,800 and it made the same amount of difference.
So minor adjustments in rental price make a difference no matter the rental market. You just have to find the sweet spot. Also, don’t forget that you are allowed to make a profit. This is a business after all and pricing at a loss doesn’t do anyone any favors.
Don’t forget as discussed here, you should also be following new conventions of pricing. You should be using whole numbers to take full advantage of the price you can get and so you don’t have an overpriced rental.
Let’s go even further!
So you lowered your house rental price to $50 under the “top” of the market and now it is TOTALLY rented out. YEAH! Did you know that you can still recoup some of the previous loss by having a VERY tight lease?
While I am NOT a proponent to nickel and diming ANYONE; make sure you are being tight with your expenses. We have found through our buy out clause, deductible, no pest control and landscaping that we have been able to keep tighter control over our costs. No one gives you credit for covering ALL of those with a higher rent amount. We have had better luck having a “slightly” lower rental price and not including those extras. Not only is this “normal” and expected by many tenants (again not nickel and dimming but by being conservative with what you offer); I have found that tenants take better care of the home since there is skin in the game.
What is your experience? Have you ever had an overprices rental? Do you price your rentals in comparison to what you offer?0