Rental Pricing Strategy

[Steve J.]

Hello All,

I am renting out my first property that I am house-hacking. It’s a single family, and I am using property management for tenant placement. I would like some advice on the pricing strategy, both property management companies told me realistically I should expect $1,640 - $1,660. One told me that due to the virus, average days on market are higher, and viewing of houses has taken a dip as well. She recommended that I come in as close to the “realistic price” as possible and that given the circumstances (increase average days of market, less contacts, etc.) I shouldn’t be aggressive. What approach do you guys recommend I take with the pricing? Come in right at what I’m being told I’ll get or come in high and see what happens then make adjustments accordingly? I plan on listing it Tuesday. Please give me your thoughts.

Thanks

[Abel Curiel]

Originally posted by @Steve J.:

Hello All,

I am renting out my first property that I am house-hacking. It’s a single family, and I am using property management for tenant placement. I would like some advice on the pricing strategy, both property management companies told me realistically I should expect $1,640 - $1,660. One told me that due to the virus, average days on market are higher, and viewing of houses has taken a dip as well. She recommended that I come in as close to the “realistic price” as possible and that given the circumstances (increase average days of market, less contacts, etc.) I shouldn’t be aggressive. What approach do you guys recommend I take with the pricing? Come in right at what I’m being told I’ll get or come in high and see what happens then make adjustments accordingly? I plan on listing it Tuesday. Please give me your thoughts.

Thanks

Hey Steve,

Your PM is right, showings are down. The less showings you get for your property, the less rental applications you'll collect and the longer the property will sit. 

If you overprice the rental, you'll risk having it sit on the market and having non-qualified tenants check out your property. You can, however, try this strategy with the intention of dropping the price after X days. If you aren't in an immediate hurry to fill the vacancy, this could work out.

I'd recommend pricing it realistically and adding a virtual tour to your listing. You'll get more applications and have a greater pool of applications to choose from.

Best of luck to you moving forward!

Abel