3 Signs It's Time To Lower Your Asking Monthly Rental Price

By Danielle Wirsansky on March 7, 2020

No property manager ever wants to drop the price of rent on their property. Usually, increasing it is ideal. However, sometimes a situation arises where it might be the best choice to keep your property afloat and paying for itself rather than becoming a burden on its owner. Desperate times call for desperate measures.

If you are a property manager, how do you know when it is time to lower the rent? It can be a tough and sensitive call to make. Read on to learn some of the signs that signal that it is time to lower your asking monthly rental price!

Photo by Tembela Bohle from Pexels

When You Can’t Fill Your Properties

Being a property manager is a pretty complicated job. But the one very uncomplicated aspect of the job is how you make money doing it that can be distilled down to one short phrase: no tenants, no money. If you do not have anybody living in your property, then you are not making any money off of your property. And every day that your property sits empty is another day that you are not making any income off of it. And while that property does pay for itself, it can’t do that if no one is living in it and paying rent.

So if you are having trouble keeping old tenants or signing new ones to live in your property, then it might be time to drop the price. There could be a number of factors affecting why renters are not flocking to your property. But to be honest, a tenant paying something (even if it is less than you would have liked) is better than no tenants paying nothing towards your property.

Dropping the price even just a little bit could be enough to attract you some new tenants or convince a current one to remain. It might not be ideal, but it might help you pay those bills, which is the most important thing of all.

When Renovations Are Overdue

When deciding where to live, a lot of people will make their final decision on if the price of rent is worth it based on amenities offered and how modern and updated the space is. Usually, properties in a particular area will tend to have similar prices. But if your property does not have the same or competing amenities as the ones around it or if it has been a number of years since you have updated or renovated your property while those in the area have, you might have some problems.

Even if your property does not have as many or the same amenities or has not been updated in a while does not make it unlivable by any means. But you might not be able to charge the same prices as your competition in the neighborhood. This might mean to stay competitive, you might have to lower your asking monthly rental price.

A lot of people are not interested in or do not need incredibly modern living spaces or a plethora of amenities. They would rather pay a better price than have those things. Or you might want to consider cutting the price to get more tenants so that you can afford to reinvest in your property and get those renovations done—that way, you can raise your asking price back up.

When Your Competitors Drop the Price

Going along in the same vein, if your competitors drop their prices, it is likely that you will have to drop your prices as well. You know how gas stations in the same vicinity generally have the same price, but if one has a price that is even slightly higher, no customers go to it? It can often work the same way with properties.

Why would a tenant pay more for a property that is almost identical to the properties around it, except it is just a little bit more expensive? They often will not. Be sure to keep an eye on your competitor’s prices so that you are not blindsided if they decide to drop the price for any reason. And if they do, you might have to make the decision to drop yours as well.

Photo by PhotoMIX Ltd. from Pexels

Only you can decide if the time is right or if the decision to lower the asking monthly rental price of your property is best for you as every situation is different. Do not make a decision that makes you uncomfortable but also try to be open-minded and help yourself if you can, rather than being stubborn or foolhardy. Good luck with your rental properties and may you have the very good fortune of having many tenants sign on to live at your property!

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