Rental Analysis and Rent Reductions in Property Management

Here’s what we have concluded to be the sweet spot for leasing. The goal is to occupy your investment property within 30 days, based on experience, we have found that a property should receive at least 2 showings per week. This has shown us that the rental price is just right and within 1-3 weeks the property is typically rented. Now 3 or more showings per week is a GREAT sign and means the home may get rented even faster. One main factor to consider is move in availability of the potential applicant, some will be required to give a 30 days’ notice to their current landlord once they find a new home. This is why we ask for an average move in date within 2.5 weeks of the application approval date (this can always be adjusted per homeowner’s request). Just keep in mind this is not an exact science, there are many variables that contribute to the amount of inquiries we receive. Our example applies to rentals up to 3 bedrooms and up to $2,500 in rent. Once we start to get above 3 bedrooms and above $2,500 in rent, it may take a bit longer. Similarly with furnished versus unfurnished properties, pool versus no pool – a lot to do with desirability and location too.

A prolonged vacancy can become costly, and fast!

Consider this: you have a $2,500 rental property sitting vacant. If the property sits vacant for 2 months, that’s a $5,000 loss over the course of a 12-month period. Imagine reducing the rent by $200, that equates to $2,400 loss in a 12-month period. Less than holding at a high rent amount of $2,500 and potentially losing $5,000 or more!

As part of our aggressive leasing efforts, this is why we suggest reducing weekly, and we typically reduce at $50 – $100 increments. It all depends on how high we initially started. Speaking of high, we don’t suggest starting too high as first impressions matter. There are many factors that play into the home sitting on the market too long, and high rental rates is one of them. If someone is looking to rent within the next 30-60 days and they came across your listing that may have been perfect other than the rental price, they may not be interested in circling back even if the rent was reduced.

The Market Rental Analysis is based on 12+ years of experience, knowing where to look, and what to look for. Most obvious are searching for properties that are similar in size and features, however there are other more complex things to consider when providing you a complimentary market rental analysis such as the current rental trends including market temperature (demand), property availability (saturation), and rental price changes over time.

We provide you with a weekly vacancy update after collecting all activity from the previous week and complete an updated rental analysis to offer suggestions for the upcoming week.

Lower rent amount = higher interest = increased potential applicants = better tenant options = faster occupancy

Do not mistake “Lower rent amount” for CHEAP, many investors believe the higher the rent amount the better the tenant – because who wants to pay high rents and a high deposit and not maintain a property, right? Although there is truth in that, it is not necessarily always the case. That is why we have higher standards for our tenant requirements – this helps balance things out.

Are you ready to request a complimentary rental analysis? Send an email directly to: Jessica@nxtlvlpm.com or give us a call 239-744-2205.