Can lower rent actually get you better qualified tenants?

[Johann Jells]

My wife has this theory that lower rent actually gets you better qualified tenants, on the premise that since they're more desirable but often just as frugal as anyone else they can stand out from the field and get the unit.  I worry that I'd get so many applicants that I'd never find these better qualified ones in the stack of marginal ones. 

This last vacancy was pretty brutal. Lots either on unemployment due to Covid or with bad credit, or both. I had a family of 4 adults applying for a 700 ft unit with 2 7x10 bedrooms! Normally need 3x gross and 650, but finally rented to a guy with a solid State Govt job of 6 years that paid 4x rent, but had an abysmal 530 FICO. He was putting his finances back in order and we took a chance on our sniff test. Done it couple times before and it worked out, but I'm not happy about it. I have another vacancy coming on the 15th and I'm dreading it...

[JD Martin]

Lower rent will (in theory) get you more tenants that meet basic income threshold requirements, so if that's your only criteria for qualification then your wife would be right. However, if you have other criteria, such as credit score, employment history, etc, then the percentage of qualified applicants to applicants will likely be lower with lower rent. 

It depends on your market. If you have a healthy market then your rent should be fine at/a hair below/a hair above market. If you have a sick market, then you sometimes have to dredge through the muck to find someone that will work. Your theory that higher income will self-exclude more marginal applicants is correct.

Personally, I don't want "frugal but good" tenants. I want tenants that recognize a fair deal and a quality house and are willing to pay what it costs to procure said house. In business the biggest PITA people you will ever deal with are "frugal" people and "rich" people. Frugal ones think everything should come as cheap as possible for them, regardless of their ability to pay, and rich people think every dollar they give you is worth two. They're 2 sides of the same coin. The buyer I want is the one that wants to be treated fairly and wants to treat their vendor fairly.