I met with an owner today that was convinced her property should rent for $800 or more. I explained to her that the owner two doors down was asking $650 and the comparable rents in the area were closer to $700.00. Her vacancy was extending into its third month with no bites.
To make matters worse, the neighbor upstairs was noisy and had two illegal tenants.
In my estimation, the root of the problem is an over priced property. Rents that are too high make an owner make bad decisions. Since only a few people apply due to the high price the owner gets desperate. The only tenants that apply are those with bad or questionable credit, bad or no rental reference, and income that may not qualify for the long term. Why, because good tenants shop price and can live anywhere. Bad tenants have to find an owner that has no standards.
In the end the owner will have to make a tough decision. Continue with the high rents and those problems, or lower the rents and have fewer problems and less income. But, the income may actually be higher at lower rates as it will be collected and vacancies will be filled.
Robert A. Machado, CPM, MPM
HomePointe Property Management
Sacramento, Yolo, El Dorado, and Place Counties
We manage residential and commercial property.
916-429-1205 x 105
rmachado@HomePointe.com
Rents too high are not going to fly in this economy -- some owners just do not "get" it.
Good Points Robert, again it is about using professionals to get the job done right.
Robert, I never looked at it quite that way before. It makes a whole lot of sense...of course pricing a home right whether it's for sale or lease always makes sense.
Good post Robert. Wallace reblogged this and my comment is on her post because we did not see it listed in the Property Management group!
Robert, I am a landlord and I agree with your points. Price it right and it will fill. Greed can cloud reality. I would prefer a paying tenant over a vacancy any day.
Robert, many owners think all that you have to do is run an ad on Craigslist and a tenant will appear. It is alot more complicated and involves knowledge of many legal points. I have seen owners get in trouble and lose so much money because they didnt want to spend the monthly management fee.
We need to educate them that not only do Property Managers take away their monthly headaches but we keep them out of court.
The hardest part of our job is managing expectations!