Should we drop our price?

[tarheels]

Our rental house has been available for 3 weeks (though it's been listed longer in anticipation of the old tenants moving out). We've had lots of inquiries: 2 requests to hold the place til Sep/Oct, 3 people who requested a showing then cancelled for unknown reasons, 1 person who wanted our house if they couldn't find something in their preferred school district (but they did), 1 showing for a family of 6 (the layout genuinely wouldn't work), 1 showing we never heard anything back on, and 1 showing scheduled for tomorrow.

But the local schools start Aug 3 - I'm afraid we won't get many bites after then. Our list is $2250 and there's $150 of profit there; $2100's our break even. But with all the inquiries, I'm not sure that price is the issue... WDYT? For the family of 6, I told them there was room in the price, but that didn't fix the floor plan. Would you drop the price? If so, to what? Or with all the interest would you say the price is fine and it's just a matter of waiting for the right tenant?

[kaylie]

How are you advertising it? If it's craigslist and you haven't done this already you might want to try reposting every day. When our landlady was listing ours she posted once on a Sunday and only got one reply. She posted it the following Friday and got five replies.

If you do a price drop, I would make contingent on signing the lease by a certain date.

[emjacobs]

Also have you contacted the people that requested you hold to September and see if they are willing to sign a lease and pay first and last months rent plus a holding fee of $xxx per month?

I'm certain if it were me and I knew that I needed a place in September and I found the place that I wanted that I would be willing to sign the lease now and provide first and last months rent (like in a normal renting situation since it would be required at move in) and pay a holding fee since the landlord would not be able to rent the home for that time.

Or contact them and say that you are willing to hold the home for them until the second week of August if they would like it they can sign the lease then. They are still going to end up paying a little more than they probably wanted but it gets them and you what you both need.

Otherwise I would continue to repost on Craigslist daily or every other day. If your not posting on Craigslist then get on it! Make sure in your ad that you list that price is negotiable to the right tenant. I'm not sure how the road traffic is in front of the property, but do you have nice signs up at the end of the driveway and the road leading to the home? You might be able to grab someone that is driving around looking at the area to at least drive up to the house and get the phone number.

If you have a sign it might be worth it to add a document box to it and put ad's for people to grab.
Realistically September isn't that far away.

[minniebee]

I would consider a price drop if you don't get a lease signed by July 15. Yes, it sucks to take in less rent every month, but dropping the price by $100-$150 a month means you lose $1200-1800 over the course of a year. If you keep the price at $2250 and end up not getting it rented for another month, you've lost $2250.

That's what we did when renting our condo. We had it advertised at $900/month, but ended up signing a lease for $850/month just to get it rented. It cost us less to drop the price by $50/month than to have it vacant for a month with no rental income.

[downtoearth]

Jul 12, 2012 10:53:21 GMT -5 minniebee said:

I would consider a price drop if you don't get a lease signed by July 15. Yes, it sucks to take in less rent every month, but dropping the price by $100-$150 a month means you lose $1200-1800 over the course of a year. If you keep the price at $2250 and end up not getting it rented for another month, you've lost $2250.

That's what we did when renting our condo. We had it advertised at $900/month, but ended up signing a lease for $850/month just to get it rented. It cost us less to drop the price by $50/month than to have it vacant for a month with no rental income.

I was going to say the same thing. Waiting another month won't earn you anything else in the next year, so I'd drop by $100 and post daily on Criagslist and any other online site I could find. Good luck.

[mrs.jacinthe]

Honestly, one of the reasons we chose our rental was because it was pet friendly and provided free satellite tv. Well, that and we were desperate.

If you're not already pet-friendly, would you consider it? It's definitely something that would separate your home out from any others.

[minniebee]

Jul 12, 2012 13:52:49 GMT -5 mrs.jacinthe said:

Honestly, one of the reasons we chose our rental was because it was pet friendly and provided free satellite tv. Well, that and we were desperate.

If you're not already pet-friendly, would you consider it? It's definitely something that would separate your home out from any others.

Yes!

Unfortunately, the condo that we rent is part of an HOA with pet restrictions. Each condo can have up to 2 cats but no dogs of any size. Both times we've advertised it for rent, we've received so many calls asking if we allow dogs. It's been stated clearly in our listing that cats are welcome but dogs aren't allowed, however people don't pay attention and ask anyway. It sucks, because I'm a dog person and wouldn't have a problem with tenants having dogs as long as they cleaned up after them.

In any case, there are always a lot of renters looking for pet-friendly places, so if you're currently not allowing them, it might be something to reconsider.

[tarheels]

Let me see if I can address all the questions...

- CL isn't used locally. The house is listed on the MLS, Trulia, Zillow, and a local website. Exposure's not a problem. Drive-by traffic isn't possible - we're deep in the back of a secluded neighborhood with twisty roads.

- The main difference btwn our house and others is our house is 23 years old. The city is very young, so you can rent new or recent construction just as easily. That's appealing to lots of people, even though our house is completely updated. We don't have an open floor plan; it's very traditional with formal LR and DR. And it won't work for young families since the MB is clear at the other end of the house and on a different floor than the guest rooms. Our house is also 100 yards from rural interstate, so you can hear cars wooshing by, but there's never traffic noises; you can't see or be seen from the highway because there's woods between the house and the road.

- Our house has rented for this amount for the past 2.5 years. The local market is largely insulated from national troubles, and an agent thought $2200 was fair for the house in January when we last spoke.

- I've never seen incentives done locally on a SFH. I know they're done for college apartment complexes, etc, but I don't know that that would be a motivator in our market and in our price point. I'll discuss it with DH.

- The people who wanted the house for September also wanted it for $1975 and for three years. That's a $4,500 loss. So we'd be out $2100 for August, and say $1000 for Sept, plus the $4,500 for 3 years. They are our last resort, but I just can't imagine we have to go to that extreme.


Maybe I'm mistaken in putting a premium on our upscale neighborhood. Sure, you can rent a vinyl box that's the same size and bedrooms on a treeless lot for less than our house, but I don't consider that a true comp. Maybe people moving to the area don't care about that and are ok in ugly vinyl neighborhoods since it is just a rental. We also offer a great commute - being that close to the interstate has its perks and that's the main one. Most of our true comp neighborhoods have gnarly commutes on congested city streets...one of the main reasons we chose this house to begin with.

Our Friday showing has now moved to Saturday, so I think if they don't take it, I think we'll drop to $2175. That gives us $75 of profit and room to negotiate.