How Long Should I Wait Before Lowering My Rent Asking Price?
Owning rental homes is extremely rewarding, but there are many problems property owners run into along the way that can be obstacles to success. One thing that can be discouraging for homeowners is watching the days pass by without seeing any interest in their rental property. There could be various reasons why you can’t find a tenant to occupy your home. It may be because of maintenance issues, lack of interior design, or the location of your property. A more common problem we see, however, is that you may not know how to price your home for rent.
3 Common Questions From Rental Property Owners
Pricing your rental property can be a hard undertaking, but with our knowledge, we can help you find just the right price for your home. Knowing if it’s time to lower your rent asking price could be just the thing you need to find the perfect tenant to occupy your space. Read on for answers to 3 popular questions we get from homeowners regarding pricing your home and finding tenants.
How Long Does it Take to Find a Tenant?
TrueDoor Property Management leases hundreds of properties a year and has anywhere from 10-20 rentals being advertised at any given time. If you’re in the process of finding a tenant, you may be wondering about the average length of time it takes to gain inquiries for your property.
How do you know if it’s taking longer than usual for a potential tenant to look at your rental home? Here’s the rule of thumb we follow: a property should get at least 2-3 serious inquiries a week. What do we mean by serious inquiries? A serious inquiry could be a phone call from a prospective tenant, or a scheduled house viewing for the individual. In addition, it shouldn’t take longer than 30 days to find a tenant for your home. This amount of activity indicates that you’re on the right track with pricing your property and fulfilling its potential.
How Do I Price My Home For Rent?
Learning how to price your home for rent is one of the more common challenges for homeowners. Pricing your rental property too high can be the cause of finding unreliable tenants, but pricing your property too low could prevent you from getting the profit your home deserves. If you need guidance on getting the right price, check out our article on how to price your property.
When Do I Need to Lower Rent?
Like we stated before, a rental property should get a signed lease within 30 days of being on the market. Continued vacancy can quickly become a costly problem. For example, a $4,000 rental home sitting empty adds up to about a $1,000 loss a week!
The best practice to avoid a vacant property is to put your rental property on the market and adjust the rental price in the first 1-2 weeks. We encourage you to not wait until 30 days have passed to change the price. If it’s been 1-2 weeks and you’re not seeing 2-3 prospective leads a week, it’s time to lower your rent price.
If you are getting 2-3 leads and still don’t have a signed lease, there’s probably a cosmetic issue. People are interested in the property, but after seeing it they get turned off. Upgrading your rental property through interior design choices, tenant feedback, and more can easily fix this issue.
When considering if you should lower your tenants’ rent, we recommend steering clear of tenants that are not properly qualified. Prospective tenants who offer to pay above your rent asking price are generally not trustworthy. Our 40 years of experience have taught us to avoid this type of situation.
When potential tenants have bad credit or poor rental history, they usually end up renting from desperate landlords who are overpriced and have been on the market for an extended amount of time with no prospects. We’ve seen that the lower the price of a property is, the higher amount of interest property owners receive. Increased interest leads to more applications, better tenant options, and quicker fillings for vacant rental properties. The best strategy for a rental property is to fill your property within 30 days with a reasonable asking price, then renew the lease agreement each year with an appropriate rent increase.
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If you’re a property owner in Southern California, we’d love to help you gain financial independence by investing in the housing market. Our offices in the Inland Empire and Orange County offer professional property management services for rental homes, condos, and apartments. Contact us today to get the resources you need to generate wealth.