Author Topic: changing your listing price?  (Read 728 times)

sol

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changing your listing price?
« on: March 12, 2017, 08:26:41 PM »
If you post a place for rent and are immediately swamped with offers, I think that suggests you've underpriced your rental.

At what point does it become gauche to remove your listing and re-post it with a higher price?  Within 24 hours?  After you've shown the place to people?  After they've submitted rental applications?

I recognize that everything is negotiable until you have a signed lease agreement with one specific person.  I don't think I'm legally bound to rent at any given price just because I offered it up at that price.  But I'm pretty sure I would feel shitty calling a bunch of folks who want to rent from me based on a published rental listing, and telling them the price just went up.

We're going to be in the market for new tenants soon, and my wife and I disagree on what to price it at.  Her argument is that if you go too low and get 50 applications in the first day, then you just relist at a new higher price.  What do you think?

Spork

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Re: changing your listing price?
« Reply #1 on: March 12, 2017, 08:58:32 PM »
It's pretty unlikely someone would call you on it... but it sort of seems like deceptive advertising to me.

If a major corporation advertised something for a price... say an automobile... and you showed up, cash in hand and they bumped the price up 10%... how would you feel about that?

Now, I've never looked into being a land lord, but I know there are a crap ton of anti-discrimination laws.  If one person that submitted an offer is in any sort of protected minority, the first likely thing to come to their mind is, IMO, "OH... he didn't want to rent this to <insert minority here>."   

I'm not sure I'd want to risk that.  If I advertised it, I think I'd honor the ad.  Lesson learned.  Bump the price when the lease ends.
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lhamo

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Re: changing your listing price?
« Reply #2 on: March 12, 2017, 09:15:49 PM »
I've seen lots of ads on CL where there is one price listed in the header, and a different one in the text of the ad.   I always wondered why --maybe this is a sneaky way landlords get around the pricing question.   FWIW, I never pursued those ads because I was afraid of a bait and switch, and also didn't want to deal with a landlord/management company who was that sloppy (if it was just a clerical error).  I also would not be inclined to rent from someone who listed something, pulled it, and listed again at a higher price like you are suggesting doing.  That could also easily be interpreted as a CL scam (I did run into one of those last year -- listings were 6-8 weeks apart, though, and the second, higher priced listing for the same unit was clearly a scam and not just the owner re-running an ad for the same unit at a higher price).   

Is it REALLY that hard to figure out market pricing, though?   Seems like trolling CL for a few weeks and seeing what units in your area go for what prices in what timeframe would give you a pretty good idea of what the market will bear.   And ultimately, a good tenant is probably more important than getting absolute top dollar.

   
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cchrissyy

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Re: changing your listing price?
« Reply #3 on: March 12, 2017, 09:43:11 PM »
The only way I think it would be OK is if you took it down the first day, before proceeding with any showings or conversations with potential tenants. 

Like, if you posted it one morning and got 10 replies that day, or whatever that felt like "way too many" based on your past experience, then I would say, ok fine, take down the ad, wait a day, re-list higher.

But, you can consider those first replies tossed out, and would be doing this on faith that new ones will come the next time around. Much better not to mis-judge the market in the first place!

monarda

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Re: changing your listing price?
« Reply #4 on: March 12, 2017, 10:23:55 PM »
Much better to list at the higher price first, then reduce or offer a promotion if you don't have enough response.

But if you live in a large enough city, a craigslist post will likely attract enough unique visitors in a 48 hour period that most people responding will never know that you changed the price. Especially if you changed the price over $100 so that it'd fail a search function at the new price. I would not change the price after showings.

We had the same problem a couple of years ago, when we got a tremendous response to our rental that was priced too low because the two of us disagreed on a price. We got many applicants and rented at the lower rate. We raised the rent at lease renewal time, but the rent was increasing in the neighborhood at a faster rate, so we were still under market rate.

In crazy markets like NYC, I've heard of prospective tenants offering to pay higher rent than the advertised price. I don't think that happens here in my city, but I wondered if that happens elsewhere.
« Last Edit: March 12, 2017, 10:28:30 PM by monarda »

srob

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Re: changing your listing price?
« Reply #5 on: March 16, 2017, 01:18:50 PM »
Interesting question. I agree, list on the high side and reduce from there if needed.

I had a rental open house last year and a ton of people showed up and sent in applications. One guy saw the crowd and emailed that he was willing to pay $80 more/mo than the listed rent to get the apartment. A couple in a different instance offered a one-time bonus payment of $100 if they got the place. What are your thoughts on accepting these offers?

Megma

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Re: changing your listing price?
« Reply #6 on: March 17, 2017, 07:50:43 AM »
+1 for listing high and then moving down if you don't have enough replies. This is easier than going the other way.

We listed our rental house last year at 1375/mo and had some interest but no lease, so the lowered it about $50 every 7-10 days until we rented it at 1225/mo.

You also might be swamped with calls but not get a lease. I was getting tons of emails, texts and calls even at 1300 but people would come for the showing and not rent it (our house looks like a B+ online with some renovations and a huge yard but the C neighborhood turns a lot of people off.)
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MommyCake

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Re: changing your listing price?
« Reply #7 on: March 17, 2017, 10:06:23 AM »
Agreed, always list higher.  You will get "higher quality" tenants by listing a higher rent, plus this puts you in a better position for when people try to haggle. 

BAMxi

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Re: changing your listing price?
« Reply #8 on: March 17, 2017, 01:44:07 PM »
I agree that you should always list higher to attract a higher quality tenant. Even if it takes you a month longer to rent, you'll make up for it in the condition of the unit when you get it back as well as the additional rental revenue.

I don't know your status as a landlord (if you have multiple rentals, etc) but as a property manger, I'd advise you to be cautious on raising the price on an individual lead after you have met with them, if that lower advertised price is still listed elsewhere or being offered to others. You could be in violation of the fair housing act in doing so, and it could look like (even though it's not your intent) that you were setting different rent rates for varying people and not offering the same opportunity to everyone equally. If anyone whom you show the unit to are a member of a protected class, you could have a difficult time explaining your way out of it. If you intend to raise the asking price, I'd suggest you update the ad first and contact each and every person who has reached out and inform them that the rent price has been revised to X and to please contact you if they are still interested. Or, simply find new leads all together.

Capt j-rod

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Re: changing your listing price?
« Reply #9 on: March 18, 2017, 09:54:03 PM »
The rent I charge is what the property requires. I am usually $50/ month less than the competition. Why? Happy tenants. If they are happy they stay. If they stay I minimize turnover. I have tenants that will probably live the rest of their lives. When they start to see better places for less money then they move. A little more now ends up costing a lot later. A full turn over for me usually costs $2500 in materials and 2-3 weeks of my labor!

sol

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Re: changing your listing price?
« Reply #10 on: March 18, 2017, 10:13:05 PM »
We re-rented.  We didn't raise the rent enough, as expected, and probably left at least a thousand dollars on the table over the course of a year lease.

But on the bright side, we didn't have any trouble finding (what I think will be) a quality tenant, ready to move in on the first day it's available, so zero downtime between leases is nice.

I'm not really worried about tenants moving out because they see better deals elsewhere.  We have nice single family homes in desirable neighborhoods that fetch large rents from working professionals, and both of our previous tenants moved out when they bought their own houses.  Our new tenant will also move out after a year, to buy a new house.  We're a temporary one-year home for them while they relocate from out of state, and then they too will buy another house. 

The downside of renting homes like ours is that despite the high rents, they rarely meet the 1% rule for cashflow because the values are so high.  We make most of our money on mortgage paydown and (thus far unrealized) appreciation.

Capt j-rod

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Re: changing your listing price?
« Reply #11 on: March 19, 2017, 09:35:15 AM »
I am doing the same. I do make money, or at least it never "costs" money to do this. I never take money away from my property. It grows until I buy another house. I treat it as my retirement and hoe that in 15 years I will have enough to live off of with other investments. I could easily FIRE in five years, but I hope to build it bigger before I throw the switch. I'm already self employed and my wife likes her job. If she changes her mind then we go. I hope to be 100% debt free in 5 years. We aren't worried about it, but we are playing around with quality of life post FIRE. The machine is in motion and already kicking ass. I guess it will come down to when we are tired of employer bs to throw the switch. LOL

Spork

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Re: changing your listing price?
« Reply #12 on: March 19, 2017, 09:37:24 AM »
We re-rented.  We didn't raise the rent enough, as expected, and probably left at least a thousand dollars on the table over the course of a year lease.

But on the bright side, we didn't have any trouble finding (what I think will be) a quality tenant, ready to move in on the first day it's available, so zero downtime between leases is nice.


I'm not a landlord, but I'd hazard a guess that a quality tenant is worth more than the extra $1k a year in headaches caused by low quality tenants.
Some will sell their dreams for small desires
Or lose the race to rats
Get caught in ticking traps
And start to dream of somewhere
To relax their restless flight