Priced too low

[Jacob P.]

Hi guys,

My wife and I recently closed on our 2nd rental property (thanks to a lot of advice from the BP forums!). Things are going great, and we just listed it for rental and held an open house.

We seem to have priced the property too low! The open house was packed, and I even received some inquiries that were skeptical of it's reality "Very interested in this space, but the price is so low. Would like to talk more"

Based on speaking to our selling broker, (who also does rentals) and a few other people, we might be 15-25 percent below market.

We've definitely learned our lesson, and I think there are things we can do prevent this in the future. But my question now is whether we should circle back and raise the asking price.

We've already posted online ads, had lots of people spend time to come out and look at the space, and there's something that feels deceptive about looping back and telling them we want more money (or posting a new add).

At the same time, I feel like we should be looking at this from a perspective as a business owner, and we are really leaving money on the table from a financial perspective.

Has anyone else ever experienced this? Would love to hear your thoughts.

[Bud Leiser]

Ndy it's a rental (buy and hold) not a sale (flip)

How many people filled out an application?

Take the best applicants and let them know straight up that there's too many applications, they are in the top 5 (or X), would they be willing to spend X dollars more for the property?

From a Renters stand point I wouldn't want to play the cat and mouse game "How much more would you bid" scenario, it would red flag me. But if the landlord was honest, told me the situation, told me it's his fault for pricing it too low and the only way to resolve the issue  (too many applicants) fairly was to raise rent and that raising rent now meant he wouldn't need to raise rent next year (see the positive spin here)... I'd be down with that. 

Cheers.