Christian OsgoodCEO, Multifamily Strategy · CEO at Multifamily Strategy

Keep rents low to make more money???

28 Nov 2022 · 1 min

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Christian Osgood argues landlords should price rentals 10% below market rate. It attracts more tenants, keeps them longer, and forces you to underwrite more carefully. Better tenant quality and retention often outweigh the lower rent.

Chapters

Here's 3 reasons we rent our units 10% under market rent. You might want to consider doing the same thing. First of all, if you have an identical unit right across the street but you cost 10% less, you just get a wider selection of potential tenants. If you cost less, people will come to you first. Second, they're going to stay longer. If there's any reason to leave, they'll just go to another identical unit at the same price. If you cost a little less, that is a great reason not to move. And lastly, you have to do more conservative math, which means better math. You have to be able to do deals that work with 10% less than market rent. So when you're factoring that on Rentometer, Apartments.com, whatever you're using for your comps, subtract 10%. At least they're going to keep better tenants longer.