Rental listing blowing up, advice on raising rate / bidding war?

[Spencer Zeff]

Hi! 

One of my units is opening up in September.  We decided to raise the rent by 12.75% and put it on all the listing websites, but most importantly StreetEasy (the go-to website for rentals in NYC).  Since we put it on the market on July 26th, the listing has been saved by 141 users on StreetEasy and 34 groups (and counting) are signed up to come to our open houses this week.  On top of that, we have had at least 10 people say they want to apply before they even see the apartment.  Due to this extreme volume of interest, we are thinking it might make sense to raise the rate before our first open house to weed out some of the interested parties.  Our other option would be to ask prospective tenants to "submit their best offer".  Does anyone have any advice/best practices? 

[Theresa Harris]

Quote from @Spencer Zeff:

Quote from @Sergey A. Petrov:

I wouldn’t ask anybody to submit their best offer. I would do some market research to determine the fair market value, change the rate to that (or slightly below if you are so inclined) and then communicate that to the interested parties. You could say something like “due to the unexpected extremely high interest in our apartment for rent, we’ve decided to increase rent to $x. Let us know if you are still interested. We will still be holding the open house as scheduled and moving forward with our normal process of selecting a tenant”

Hi Sergey, 
This is good advice.  We did a fair amount of market research and the comps indicated that the rate we chose was fair market value.  However, our unit was hard to get great comps for, as it has a great backyard with a hot tub.  While getting the highest rate would be great, we also care strongly about the quality of the tenant.  So,  having a large pool of applications to pick from isn't a terrible thing.  We are a very small team, doing the property management ourselves. Thank you very much! 

Take the first 5 people who are qualified and start screening them and checking references.  Go with the first one who fits.