Accepting Lower Rent

[Steven Pierpaoli]

I've owned a quadplex for almost 2 years, land-lorded by a property manager since Day 1. I've had one of the units vacant the entire length of my ownership - the initial vacancy was filled, then a troublesome tenant moved out. This second vacancy has spanned nearly a year.

I have been challenging my property manager for several months on filling this vacancy. Today, I was asked by the PM if I would take $700/mo. for the empty unit, where $800 is the advertised rent. Prior to purchase 2 years ago, I had determined that a reasonable rent was $700-850, with the caveat that these are a bit hard to estimate as 3-bedroom units in a 2-bedroom market, with the units a bit more upscale that typical in the neighborhood. Two of the other 3 units rent for $800, with a legacy tenant leased at $650.

Should I take the $700/mo.? I think the risk is that this tenant stays awhile and I earn what I think is below market - but maybe my estimation skills are off. I am fortunate in that I break even on expenses and debt coverage with only 3 units occupied - this 4th rent is essentially my monthly cash flow.

Also, and related, am I being impatient with my property manager? Should I take the $700/mo. and look for another service provider, or do I have unreasonable expectations?

Thanks for any advice.