First Rate Property Management Blog

Owners! Get Your Property Rented!

Jim Sharone - Friday, January 24, 2020

One of the scariest times an owner goes through while renting out their property is the vacancy.  First Rate Property Management understands this and is ready to help!

You will be receiving Marketing Updates from our leasing team every Wednesday your property is on the market for rent. These updates include information about recent showings, activity with your property, current advertised rent, and our experts’ recommendations. 

What Does a Vacancy Cost?  On a $1,500 estimated rental property with a $1,250 per month PITI (Principle / Interest / Taxes / Insurance) mortgage, plus utility expenses……a vacancy can cost:

15 Days = $750 in Lost Rent + $625 Mortgage + $100 in Utilities = $1,475

30 Days = $1,500 in Lost Rent + $1,250 Mortgage + $125 in Utilities = $2,875

45 Days = $2,250 in Lost Rent + $1,875 Mortgage + $150 in Utilities = $4,275

60 Days = $3,000 in Lost Rent + $2,500 Mortgage + $200 in Utilities = $5,700

*First Rate Property Management advertises upcoming vacancies between 30 and 45 days prior to the tenant vacating the property. Our average Days-On-Market is below 30 days. By pre-leasing, we save our client anywhere between $750 - $1500 in Lost Rent expenses.*

What Will a Price Adjustment Cost?  On a $1,500 per month property:

$50 per month   =  $600 a year

$100 per month =  $1,200 a year

$150 per month =  $1,800 a year

$200 per month =  $2,400 a year

Which would you rather have for YOUR property?  Dropping the price by $100 from the start and “losing” $1,200 broken up over a year – OR – by thinking your property is worth more than the market will bear, losing $2,000, $3,000, $4,000, $5,000, or more right now?

What Should You Do?  Be aggressive with your pricing decision. It’s much better, financially, to rent your property within the first few weeks on the market making you more money in the long run. 

What Happens When You Price A Property Right?  You get more interest in your property right away. The increased interest leads to more prospective tenants physically viewing the property. We are confident that once a perspective tenant has physically seen the property with one of our well-trained showing agents, your property will be leased in no time!

Consider these other techniques:

  • Lowering the Asking Price for Rent.  If the property is move-in ready and still NOT renting, it’s always, always, always going to be because of the asking price FIRST and FOREMOST.  If a property is vacant, move-in ready, and has even the most basic marketing pictures – the property will rent at the right price.  Finding the right price is an art and a science.  When in doubt – lower the asking price for rent.  Refer to the analysis above for “What Does a Vacancy Cost”.
  • Lowering the Asking Price for Rent for 3 - 6 Months.  We will always recommend a full price reduction when a property is not immediately getting in applications or showings from interested tenants.  However – an alternate technique is to lower the asking price for the first 3 - 6 months to a new tenant.  Be careful with this technique as it can attract more applicants, but can also turn some of them off by what seems to be a gimmick.  
  • Offering a Move-In Credit. Another alternative to lowering the monthly rent is offering a new tenant a move-in credit. New tenants have to pay a large sum of money up front to get in a new property.  A $250 - $500 credit can go a long way without decreasing rental rates or costing our clients very much money!