Market Rent Increase

[Kyle Majors]

Hey BP, 

I recently thought about how residential home prices increase. Homes are priced with the current market and over time, as demand increases, home prices are bid up. On the other side, as demand decreases, home values have to be dropped by the owner setting/accepting a lower offer. 

In the rental world, how do rental prices increase if this bidding situation doesn't occur? My guess was that landlords look at the trend of demand in an area through various reports and arbitrarily set new prices. I've thought about comps, but eventually there has to be a jump from the current comp price and I'd like to know how this process works and how those higher prices are achieved. 

Thanks!

Kyle 

[Alex Deacon]

@Kyle Majors a lot of it is just getting the property out there onto the market. You pick a price based on your research of rental values and then sit back and the demand or lack of demand will tell you. Sometimes you need to let the market speak and just listen. I dont think there is any formula other than watching the market and the rental prices, talking with other landlords and your own experience. We have a lot of units and its definitely not a science.