Posted by Mike (Seattle WA) on July 28, 2005 at 18:25:21:
Of course not 
With my under-charged rent, I’m break even after vacancy and repair numbers are considered. 1 year from now…
Chooisng the correct rent to charge - Posted by Mike (Seattle WA)
Posted by Mike (Seattle WA) on July 27, 2005 at 13:35:21:
Well, I put my signs up 2 days ago and through an add up on CraigsList for what I thought was slightly above average rent for my house (which is in high retail condition at the moment.) Within 24 hours, I’ve had 6 calls, 3 shows, and 2 apps. Perhaps I’ve charged too little rent? Tough problem to have I know, but was wondering how others choose rent? I did mine through CraigsList comps and asking LLs on the street where the house is located.
Re: Chooisng the correct rent to charge - Posted by Cedric Rodebaugh
Posted by Cedric Rodebaugh on July 30, 2005 at 19:26:00:
Mike, How do you do comps on Craigslist? I frequent the local site often and haven’t seen how to do comps. Thanks, CedricR.
Re: Chooisng the correct rent to charge - Posted by Frank Chin
Posted by Frank Chin on July 27, 2005 at 18:13:44:
Mike:
I do it differently than the others as I UNDERPRICE it somewhat by 10%. Doing it this way, I get something in the range of 50 calls for my weekend open house, around 25 to 30 shows, and usually 10 to 12 apps.
On the other hand, when I did overprice it in the earlier days, I only get 1 or 2 apps, and usually from from applicants I don’t like. On top of which I have to wait for them to give a 30 day notice to their prior landlord.
Give you an example how it works out for me.
I had a SFH for rent last May, with fair market rent of $2,000. I had it up for rent at $1,775. Got about 12 apps in a weekend open house, with 3 to 4 top candidates.
I had the place ready around May 15, with a target rented out date of June 1. Called the first choice, they wanted it, and I explained a have a dozen people who liked it, but I’m giving preference to someone who can move in the fastest. This applicant explained that they need to give their landlord at least 30 days notice, and would like to rent up as of July 1.
I shook my head, and mentioned that someone already offered to rent up as of May 15.
This couple went to the next room, discussed it, and came back to offer a movein date of June 15. I shook my head and said I’ll still be out a months rent, compared to the other applicant.
Finally, the couple discussed it further, and came back and said they’ll do it for June 1, and explained they’ll probably pay rent for two places for 2 weeks to a month depending on their landlord. I replied “I like you enough to be out 2 weeks rent”.
The couple willing to move in on May 15 was a good candidate also. But the wife of our first choice couple as I recall made around $125,000/year which we confirmed, and the husband has a home based business. Their credit record was excellent.
Looking at it, I’m anywhere from a month to 6 weeks ahead of the game underpricing it, and getting a pick of tenants. By overpricing, I probably would have to wait till July 1 for a movein.
Conclusion:
-Underpricing allowed me to rent to out so much sooner. For the first year, getting a month’s extra rent made up for the underpricing.
-Having more applicants gives me an opportunity to select from a pool of good applicants.
I was a little apprehensive about someone so financially strong renting, but they explained they always rent, and hope to build their own home after they settle down, and their teenage sons graduate form college.
They have since renewed the lease.
On top of which, they paid for a new fridge, stove, washer and dryer. With the exception of the washer, they plan to leave the new appliances behind. I supplied those appliances, but they liked fancier ones.
And the reason I charge so little is got the place at a preforeclosure over 20 years ago, and I still cash flow well even with the underpricing.
Frank Chin
Re: Chooisng the correct rent to charge - Posted by dealmaker
Posted by dealmaker on July 27, 2005 at 15:57:25:
That does sound like a lot of activity for 24 hours, but it is summertime so the market is usualy hot with people who want to settle in before school starts.
One way I solved this back when I still had rentals was to CONSTANTLY monitor market rents in my “farm”. That meant calling on every sign, YEAR-ROUND, not just when I had one coming on market. Between that and a friendly Realtor monitoring rentals off the MLS I was always on top of market rates.
I also charged ABOVE market for my rents. My places were in better shape, extra amenities etc, than the competition. I never had a problem getting above market.
dealmaker
Re: Chooisng the correct rent to charge - Posted by Randy (SD)
Posted by Randy (SD) on July 27, 2005 at 13:53:16:
Piggies are cute, hogs get slaughtered. If you’re happy with the rent your advertising and you’re getting what sounds like excellent response, take the money and Run… it’s a good day. Market rents like sales prices can only be determined by comparing your rent to market conditions, if one has no idea where to start in determining market rents study the classifieds or HUD publishers an annual report indicating market rents on the national average but if I were you I wouldn’t change a thing.
Re: Chooisng the correct rent to charge - Posted by Mike (Seattle WA)
Posted by Mike (Seattle WA) on July 27, 2005 at 20:17:09:
Good story. I, as well, am not going to be losing major money every month by “Under Pricing” it a bit. Seems the way to go - and you can always raise rents later on 
Re: Chooisng the correct rent to charge - Posted by docniss
Posted by docniss on July 28, 2005 at 06:35:43:
What would you say is normal for 24 hur period? I had my first rental ready to go by the end of June. All I did was put a sign in the yard, no ads in papers, no signs posted around town and I had 6 calls between 1pm and 8pm that first day. another 7 the next morning. I rented the place that day. I was going to put ads in the paper, but I talked w/ my realto, (she said at closing that she could help me get it rented) and she said just put the sign in the yard for now, this house is on a very busy neighborhood street, many people use this as access to get to town. I was greatful and excited that it was rented so quickly. I will not assume that all will go this easily unless I buy up all the houses in this street.
Re: Chooisng the correct rent to charge - Posted by Mike (Seattle WA)
Posted by Mike (Seattle WA) on July 27, 2005 at 17:44:12:
Wonderful advice and I’ll take it next time around. I am just finishing my BG check(s) of the 1st application received (first in my hand, first chance.) Looks like I’ve found my tenants. First, last, deposit, and their income is well over my 30% requirement along with nothing silly on my record checks. They each paid a 40 dollar fee as well which is nice. Thanks for the advice all!
Re: Chooisng the correct rent to charge - Posted by Drew
Posted by Drew on July 28, 2005 at 09:15:43:
When you say losing major money I hope you would not be taking a negative cash flow on this property?