Slow to find tenants or over reacting?

[Sean Pedeflous]

Hi All, I recently closed on 3r / 2b (each unit) duplex in Fayetteville Ark right near to the college. We were able to list it just as school was ending about 2.5 weeks ago. My units are moderately priced as others in the area. There is an exact replica unit down the street higher (marketed well) and another listed for lower (marketed poorly) Both about $65 higher and lower. Both of my units are unoccupied, which is what we wanted as they were under rented prior and with school ending I thought it would getting lots of rental applications. I have professional photographs and a PM doing the leg work. We have had some interested parties and a few applicants who have seemed to have since disappeared.

My question being a first time investor, when is a good time to lower price and am I overreacting 2.5 weeks into this thing :)  Thank you in advance for you opinions!

[Nathan Gesner]

Quote from @Sean Pedeflous:

It's hard to say without knowing the market. You are already priced below some other rentals, so it could just be a slow market. Try to save the houses that are most similar to yours and watch them daily to see if they lower the rent, offer incentives, or get rented. 

1. Make sure it is clean and updated so it shows well.

2. Market it in more than one place. You can do this manually or through management software like TenantCloud and others. Put it on the most popular websites like Zillow, Zumper, apartments.com, facebook, etc. Cast a wide net and you are more likely to catch fish.

3. Consider move-in incentives. I prefer a hard dollar amount rather than a percentage. Make them pay the full deposit and first month's rent (proves they can afford it) then give them the reduction the second month.

4. Do you accept pets? Over 50% of all households have pets. If you don't allow them, you are missing out on half the available renters. Most pet owners are responsible, will pay more, and will stay longer.

5. Drop the rent. 

I know you are already $65 below the other houses, but maybe that's not enough. Do some math and compare vacancy to a price reduction. Example:

House rents for $1,500 a month and utilities cost $150 a month. One year of rent will earn you $18,000. But if you sit vacant for one month before finding a tenant, you've lost a month of rent and utilities and earn only $16,350.

On the other hand, if you drop the price $100 and find a renter quickly, you will earn almost $500 more in that first year.

Always remember: lower your price, but never lower your standards! It's cheaper to sit vacant than it is to let a bad renter in and deal with the problems they create.