How do you price rentals in a volatile market?

I have found the best way to understand your market is to look at the number of active, closed, expired, and withdrawn listings. If there are excessive active, expired, and withdrawn listings, you are in a tenant market. This does not necessarily mean the market is bad for landlords, you will just have to look closer at your closed listings to see what type home rented for what price. Find realistic comps to your listing and price accordingly. Eliminate the outliers; homes that are excessively over and underpriced. If your listing is updated, clean, and in good repair it should lease quickly if competitively priced. This also holds true with limited inventory. Rent will be higher but competitive pricing is still a must.

In todays market if you have a well presented and well marketed home you are bringing to the market and you don’t have numerous suitable and less suitable viewing requests in the first few days then you have either priced incorrectly or your presentation isn’t good enough. The task isn’t to get the highest rent - it’s to secure the best long term tenant for your clients home at a fair market rent and with the prospect that it will not be overcrowded. That your affordability criteria have priced in utility costs so that you haven’t rented to tenants who are so stretched that they can’t afford to heat it (leading to other management and living conditions issues). It’s all a balance and an experienced agent should have factored this all in.

In our current market here in southern Oregon, due to a very short supply and very high demand, just about any property will rent at what were and are exorbitant rates for the area; local incomes being as low as they are. I let all my landlords know that we can and will advertise at any reasonable rental rate that they want to, with the understanding that if we do not have any activity on the property within seven days, we are very likely priced too high and they will need to lower the rental rates. In a perfect world, you would comp out the competition and price yourself just slightly lower than them for the same amenities; this way you could attract and retain quality tenants.

One thing I have found over time (13 years) is that if you give the tenants exceptional service from the top down tenants take notice. This means smooth processes for anything a tenant would normally need ( Services, both internal and external: service call, rental payment system, any type of complaint etc). To expand. The single greatest reason I was told we could consistently raise rates, service calls. Servicing your tenants efficiently , effectively and with courtesy. Your maintenance technicians are the daily face of your business. They WILL either make or break you. Vet them well, pay them well, treat them well. It pays back more ( for both your business and its tenants) than you could ever hope for.

In our college town, students love to rent from our company. We are the largest PM company in our area, making us the most popular and streamlined rental option for students; this makes for a smooth and consistently positive rental experience. We also manage the newest and nicest properties within our demographics volume price-point, so our rentals are always in high demand. Great properties and great managers produce a great rental experience, for both tenants and owners; for this reason, we set a high bar for rentals in our area, allowing us great influence over market rate. When 75% of renters in your area carry your company's keychain, your value tends to speak for itself!

In a market that is changing rapidly, it is important to review comps weekly, minimally. Also look for new construction or conversions that may not have been your comps previously. Review your asset's leasing performance to understand your market's demand. Again, re-evaluate pricing models weekly, no less.