Why Keeping Your Tenants Rent "Low" Can Be A Foolish Error!

Although it sounds like a great idea to keep good tenants… if you are considering selling your investment property, low rents will hurt you more than you anticipate. No one is willing to pay top dollar for a devalued property. That’s right, if you are charging below market rents… you are devaluing your property in the eyes of potential buyers, in the eye of the appraiser and your neighborhood.

I’ve had seller’s ask, why are you offering $200,000 less when the house across the street sold for more. Well Mr. Seller, the house across the street was sold vacant so I can put market rate tenants that I approve in there immediately. The house next door would also sell for more because they are renting at market value currently. I will see my desired rate of return. If you are buying for rental income… numbers matter, I could be losing thousands per year based on your noble decision to help your tenants which is amazing from a social perspective, but from a business perspective, it doesn’t make sense. Looking at it another way… you can’t use visually cheaper materials on a product and then charge luxury prices, no one will take you seriously.

For more helpful investor tips, subscribe to my youtube channel where I upload content every week. I invest in Massachusetts… Boston to be specific, one of the most expensive markets in the country, my advice is relative to understanding my market… know your market and what to look for so you don’t buy or sell a bad deal.