Is it too early to lower the monthly rent advertised?

[Ngan Nguyen]

So I just started out with my first rental property. I posted my rental ad on multiple platforms (zillow, trulia, zumper, craigslist, apartments.com) and set the rate about 10% higher than the market with the intention to lower it gradually and also my unit is freshly renovated and nicer than the comps. I posted from Saturday (today is Tuesday) and I have received one to two inquiries every day. 2 people have toured the property but no one submitted application yet. 

Is it too early to lower my rent rate or should I give it a few more days? Is the level of interest that I received considered normal? This is my first time so not sure what to benchmark to. Thank you for any input!

[Michael Plante]

IMO way too early

I would wait at least two weeks 

Unless of course you are really short on funds and can’t make it if it doesn’t rent 

[Thomas S.]

I would be looking for a tenant for the first of October at the earliest so yes now is way, way to early to be second guessing your rate.

If you are hoping to get someone in for September they are likely in the process of being evicted right now so be very cautious.

[Ngan Nguyen]

Thank you! I'll give it more time. 

Interesting point about potential evicted though. I did not think about that but definitely worth considering. 

[Dick Stevens]

What did you base market rent on?  Please don’t say the ‘zestimate’.

[Mike Wood]

@Ngan Nguyen  Given the time of the month, I agree that its too early to drop the price.  I would give it at least 2 weeks.  I also agree with what @Thomas S. stated about someone looking to move in for September.  There is likely something wrong in their situation, or they are irresponsible and waited too long.  

If you arent getting the inquires you want by the end of the month, consider lowering the price.

Also, you might consider professional photos.  Usually only costs a small amount ($100-150) and makes a world of difference in your ads.

[Patrick M.]

I have taken a different tact from the sound advice given above. After renovating each of my units I wanted them rented ASAP with good tenants, but I was not willing to lose out on $1700 because I would not lower the rent by $25-50.

Like it or not I wanted to rent them immediately in the next month. I did not have a problem with proper vetting, and I believe (depending on your market) you are at a great time of the year to pick-up a good tenenat for September.

My area is a commuter hub to NY so recent grads are looking for apartments. As well as people who have vacationed in the area and are interested in moving. I had 2 tenants sign a lease/ rent when they still had a month left on their old apartments and they just took the hit because they wanted it.

There are always people getting divorced, relocating or leaving the nest. Be concerned about a potential evictee, but vet properly and you are ok.

If lowering it means I get a good tenant in in September- I would take the hit. If I lose $1750 because I won’t lower to $1700- That additional $600 ain’t gonna offset that lost month- raise on renewal.

Good luck

[Jamie Engledow]

@Ngan Nguyen Give it more time.

[Sam Shueh]

That depends on how many calls you like to be bothered. Suggest you ask them to explain their case and specify requirements like application via an eMail first.   

If you price it right you can host an open house have all come in and send them the application in advance. Then you are done as a landlord.

The prospects are knowledgeable than most landlord they will only show interest on "good" deals. This is mid-month so if you can get not entice someone quickly you will work on September, October etc. 

[Michael Noto]

@Ngan Nguyen Vacancies hurt the return on buy and hold rentals more than almost anything else. Drop it to the price of the comps and it will rent.

I'll give you an example here locally that I just dealt with for a client here in CT.

Rented a 2-bedroom apartment for a client and all things considered it was a $1050 apartment. Client wanted to list it for $1100 for a month. It didn't rent in a month at $1100, so we lowered it to $1050 and it rented in 5 days.

The trap people get in is they do their research on the comps, but when it comes time to list their apartment they talk themselves into renting the unit at a higher price because they fall in love with their unit and how nice they think it is. Forgetting that their research did not support the higher rent price when they originally evaluated the deal. I have been guilty of this in the past also.

[Ron Fletcher]

@Ngan Nguyen Try Facebook marketplace. Works like a charm for me

[Thomas S.]

Always keep in the back of your mind that the cost of a vacancy is miniscule compared to the cost of a eviction combined with intentional tenant damage.  If your priority is to rent asap your priorities are in the wrong place and you are probably in the wrong business. Although probably not for long.

Many landlords survive based on dumb luck. Don't be one of those.

[Isaac Barrow]

I would wait at least a couple weeks, but it sounds like you're still getting interest. Probably won't have a problem getting it rented.

[Anthony Wick]

When I go to rent my units I use Craigslist as the main site on what the asking prices are, and what the supply is. I actually tend to list about $25 below the going rate. Once you get a tenant, it is easy to raise the rent the following year and get that money back. But, to forego the initial $1,200-1,500 per month? That takes a long time to get back. But you really have to know your area. For that reason, I have been hesitant to buy in other areas. I know my area rents very well, and not so comfortable in other areas. 

[Linda Osborn]

@Ngan Nguyen Interesing responses. I have a completely different view & strategy than the first responses. IMO, you always put rent at or slightly below market rent. The reason for this is that (1) the quality of tenant you get is far more important than a few extra dollars a month, and (2) this gets people in the door and putting in applications right away....hopefully more than one. This gives you both a choice of which is a more qualified tenant AND the opportunity to ask for highest and best (yes, you can treat multiple applications like multiple offers). I believe bad tenants cost you WAY more than a few $$/month, so make sure you have a plan to do your due diligence (credit, criminal, rental history, income verification). Also, I agree with @Patrick M. There is still plenty of time to get good renters for September, and many good quality tenants need a place now. You may consider, however, a 8 or 20 month lease so your lease expires at the beginning of summer next time and you position yourself to have the place available at the start of the season next time around. Good luck!

[Caleb Anderson]

@Ngan Nguyen I would certainly take the advice given so far on continuing to wait. On the same note don’t wait too long and as soon as you pass the threshold of 2 weeks, or whatever you decide, I would reduce and make sure you have the highest number that will for sure get a tenant. Sitting on the rental market too long can have the same effect as a house sitting in the MLS too long- people could assume something’s wrong with it because it has been on the market for so long. Good luck to you!

[Melissa Gittens]

Reduce price after 2 weeks. Don't wait too long. But dont take the first applicant you get either. Make sure you fully vet the potential tenant 

[Linda S.]

@Ngan Nguyen,

I'm 100% with @Linda Osborn,  IMO it's better to be lower and get your pick of qualified vs. higher and possibly more desperate people.   Really great advice!     When we post ours (normally a bit cheaper than market), we get an average of 20 emails/day, and have showings and open houses...   so 2 to me likely says the market is telling you it's not worth it.    Unless of course, yours is brand new stainless steel, new WD, and things that really command the premium.  Can you post a link to the ad?    Maybe we can help offer feedback if there's anything other than the price causing the low demand? 

[Craig Curelop]

@Ngan Nguyen - Definitely too early. I would recommend waiting at least one week, especially if you are getting interest. I did this with my property as well. I started pretty high and every Monday would update my listing and reduce it by $50. In my market, $50 is a 3% to 5% reduction. 

This worked well for me as I got someone after just one price reduction.  

[Ngan Nguyen]

Thank you all for the recommendations! I really appreciate the advice as I learnt through my first time.  Will definitely vet the prospects very carefully. I'm in Northern Virginia area so the demand late/post summer is still pretty solid. I'm having a few more interested in the past 2 days. If it does not work out, I'll lower the price incrementally end of this week and end of next week to see how things go. 

[Ron Gallagher]

I am in DC so similar market to NoVA... I had a vacancy that I tried to fill with an open house this past weekend hoping to get someone in for Sept 1. I pushed it a little bit and raised the rent a little over 5% and I think I filled the vacancy as we are supposedly signing the lease this weekend. But if I didn't find a tenant I would post that there's an open house this weekend and if someone signs a lease starting Sept 1 then you will rent to them for the 10% lower/market rent. Otherwise I think you are not going to fill the vacancy and you will miss out on Sept rent. This creates a sense of urgency and someone who is looking to move in Sept 15th or Oct 1 may pay you starting Sept 1 because they like the place and the perceived lower rent.  If you don't fill the property this weekend then the property is probably going to go vacant for Sept and you might as well keep trying to get someone to move in Oct 1 with the 10% higher rent you are looking for.

Have you joined the NOVA/DC rental Facebook groups?  I get most of my tenants through facebook these days, better than craigslist which is full of scams. Plus, you can cyberstalk your potential tenants and often times see what they do for a living, learn a little about the person, etc. Also, if the potential tenant uses the puppy dog snapchat filter in their photos it's an automatic "no" for me. :)