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moneysense.ca, 4/05/11
Finding market rent: an art, not a science
Spending hours online, researching market rent, put more than $4,000 in my pocket.
Current issue:
I confess: Last night I spent hours viewing apartments online—and I’m not even looking for a place to live.
As a new landlord I was doing a bit (ok, a lot!) of research on what apartments in the area are currently offering and charging. And I’m nervous. Price the unit too low and I leave money on the table. Price the unit too high and, worst-case scenario, it sits vacant costing us money.
So I spent the better part of my Tuesday night clicking each apartment-for-rent ad and filling in my comparison spreadsheet. And yes, I used an Excel spreadsheet. I recorded how many 2-bedroom units were in my area, the asking rent, what was included and whether or not there were restrictions. The results were surprising.
Prior to my research, I would’ve under-priced our rental unit—estimating a potential loss of $4,200 in rental income each year. That’s significant and a reminder that in real estate: it’s the details that count.
moneysense.ca, 4/05/11
Jack.
Good point.
Thankfully, we didn't price our unit at the top or bottom of the market. Instead, we went a bit above average (given the type of unit it is and the fact that we offer parking).
The good news: more than 30 people responded. We had a viewing of the place on the weekend and a number of submitted applications.
After doing our due diligence, we formally offered the unit to a lovely couple.
The place is officially rented and we didn't have the unit sit a day on the market without a tenant!
I guess we learned that it pays to do a bit of research and to be realistic about what you offer vs. what everyone else is offering. I'm sure we could have priced the unit a bit higher, but then we wouldn't have had the response (and the selection of tenants to choose from).
Good technique if you want your place to also sit on the list of unrented units, posted by dreaming landlords. Take the average, and then lower it by a couple hundred and maybe you'll find a tenant quickly.