Rent Reductions: How to Make the Right Decision for Your Property Ad
Check out our guide for tips on navigating the decision to reduce the rent on your property advertisement.
Is your property priced incorrectly? – Find out when to consider reducing the rent on your Property Ad.
Determining the right price for your property can be challenging, and sometimes, we don't always get it right. Lowering the rent on your property can be an emotional decision because you may perceive your investment as being worth more. However, it's important to set aside emotions and make the best financial choice.
Reducing your rent can offer a financial advantage by potentially attracting tenants sooner. While there's always the possibility you could have earned more with higher rent, reducing it helps mitigate the risk and ensures you receive income for your property. If your property remains vacant for even a few weeks, you may miss out on the rental income you could have earned from a higher weekly rate.
Let's look at some of the signs you might need to look at reducing the rent on your property advertisement.
6 Signs Your Rental Property May Need a Rent Reduction
1. Low number of enquiries or applications
One of the most obvious signs that your property might not be priced correctly is if you’re not getting enough enquiries or applications. If your property has been on the market for a while and you’ve only had a few people show interest, then it could indicate that the price is too high. It’s important to look at comparable properties in your area to see what they are renting for so that you can make sure your property is priced competitively.
Download a Rental Estimate Report to get an idea of where your property stands.
2. Low numbers attending viewings
Another sign that your property might not be priced correctly is if you’re not getting many viewings. If potential tenants are looking at other properties in the same area but not yours, then it could be because they think it’s too expensive compared to other options. Again, it's important to compare prices with similar properties to set an appropriate rental rate.
3. Extended vacancy periods
If your property has been empty for a while, it might not be priced quite right. But how do you determine when it's been on the market for too long? If your rental property is significantly exceeding the average time it takes to find a tenant, it might be time to consider reducing the rent as a potential solution.
We typically find that the average time of a listing is around 2-4 weeks so if you're going 6-8 weeks without a tenant and there are no other unique circumstances, it might be a sign you need to take another look at your property ad.
4. Change in market conditions
Rental rates are heavily influenced by the balance between housing supply and tenant demand. An increase in the number of available rental properties in your area can create a more competitive market so it’s important to keep an eye on changes in market conditions.
If there has been an increase in supply or decrease in demand, then this can lead to lower rental rates in your area, and therefore you may need to adjust the price of your property accordingly.
5. High turnover rates
A high turnover rate among tenants at your property could indicate that people aren't willing to stay long-term because they don't think the rent is worth what they're paying for the quality or location of the property compared with other options available on the market at similar price points. This could mean you need to adjust your pricing structure accordingly if you want people to stay longer.
6. Comparable properties are renting out faster
If you observe that other properties in your area are not only renting out more quickly but also at higher prices, it could suggest that those properties are perceived as more desirable by potential tenants. These renters may believe they are getting better value from those homes, which might indicate that your property is not competitively priced.
Ultimately, staying attuned to the local market and adapting your pricing strategy accordingly can enhance your property's appeal and occupancy rates.
Read more - Tips for calculating the right rental price.
How much should you reduce the rent by?
There is no magic answer to this question unfortunately! The decision to reduce the rent on your rental property is a complex one, intimately tied to your financial situation, investment goals, and the broader market conditions. It's advisable to carefully assess these factors to make an informed choice that aligns with your long-term objectives.
Read more - How to Price Your Rental Property
Experience the RentBetter Difference.
We understand the challenges that come with managing a rental property, but it doesn't have to be complicated. RentBetter provides a comprehensive, easy-to-use platform that simplifies the property management process. From listing your property and finding tenants to creating your lease agreement and managing rental payments, expenses, bills and maintenance requests, the platform helps you keep track and ensures you stay on top of everything to do with your investment.
As a property owner, your time is valuable. With RentBetter, you can reclaim that time and enjoy a hassle-free, professional property management experience at an affordable price.
