Getting units rented during this tough time

[Marc Izquierdo]

Hi everyone,

Prior to the crisis of the pandemic really started to take effect, I had a 2 bedroom apartment up for rent.  It was listed at a competitive price and I was getting a good amount of interest.  I actually had to deny 3 applicants.  I wasn't worried that this was going to sit vacant too long.  However, once panic set in a bit more, I haven't had much interest (as expected).  I'm wondering if others are in this situation and what you plan to do?  Are you planning on dropping your price to aggressively pursue occupancy still or are you going to just wait it out (assuming it was and still is competitively priced).  There is a piece of me that thinks that even if I drop my price, people still won't show interest because of fear of coming to a showing or other interactions associated with getting a new apartment.

I was also kicking around the idea of an "adjustable rent" type of strategy where I offer rent at say $500 per month for three months to weather this storm, then it jumps back up to market price (defined in the lease).  I would still underwrite the tenant based on the market rent. 

Just looking to get others thoughts and idea on this whole situation!

[Nathan Gesner]

If you lower the rent temporarily to "weather the storm" you'll end up "inheriting the storm" from a tenant that can only afford the lower rate.

I always warn people to have a reserve for situations like this. If you don't, then you need to get creative with your rent rates to get someone in and minimize the impact. Personally, our market hasn't slowed down and we're renting things this week, but that could change any moment and I'm warning Landlords to be prepared for more vacancies, longer vacancies, and lower rent rates.