5 Times To Reduce Rent on Your Rental Property

By Ashley Paskill on November 6, 2021

As a property manager, it is more ideal to increase the rent as opposed to decreasing rent. However, situations may arise that require you to decrease rent. This typically happens when it is better to keep your business afloat than to increase the rent or even keep it the same. Ultimately, your goal is to keep your rental properties going and making rent, so it is important to listen to what your tenants and even the market are doing and working towards.

Vacant properties

It is no secret that without tenants, it is impossible to make money. If it seems like you are unable to fill vacancies quickly, you may want to consider dropping your rental prices. There are many factors that help a tenant decide what rental property to choose, but the price is one of the biggest factors. Lowering the price of your properties can help attract new tenants. Even if they are paying less than you would like, at least you will be bringing in more money than if there were no tenants living there.

Your amenities need upgrades or renovations

Another huge factor that goes into tenants choosing a factor is the amenities. If your amenities are not as up-to-date as some other properties where yours is located, you probably will not be able to charge as much as they do for rent. Not only will this help attract those who need a lower rent price, but it may also attract those who are not interested in the most modern and up-to-date amenities. Being able to get tenants into these properties that need upgrades will allow you to make the money necessary to pay for upgrades if you choose to. Look at websites and databases to see what other property managers are charging for similar properties to help you decide whether or not you need to lower your rent.

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Competitors drop their prices

Pay attention to what properties in your immediate neighborhood are charging for rent. Their rent prices may be significantly lower than yours, which would draw tenants to them instead of your properties. This is especially true if you offer the same kinds of apartments and amenities as these competitors. Tenants often look around at different properties, and they will notice similarities and differences in prices compared to space, amenities, and other factors of the rental space. Use property search websites and even national databases to see how your rent price compares to that of similar properties. If you notice competitors are dropping their prices, consider doing the same so that tenants do not choose other properties over yours based on price alone. If a potential tenant is attempting to choose between your property and another property and every factor is the same except for price, the tenant will likely choose the lower price.

Rewarding good tenants

Tenant retention is an important job as a property manager. Being able to have tenants renew their lease can save you time and money that would be spent on looking for new tenants. As a reward for tenants renewing their lease, you may want to offer and lower rent, even if just for a month. There may have been a promotion going on where you told the tenant they could save more in the future if they paid a higher cost upfront. Being a good property manager means staying true to your word and going through with these promotions. This helps you keep your reputation of being trustworthy and keeps your tenants renting for another lease period.

Your tenants are struggling to keep up

As a property manager, you should care deeply about the tenants you are renting your properties to. They are more than just dollar signs that you bring in each month; they are people with lives of their own and experiences and obstacles they face each day. If you are realizing that a tenant who has a history of being able to keep up with rent is struggling, arrange a meeting to discuss what is going on. They may have had a job change or income cut that is causing them to struggle with keeping up with rent and other expenses. While you also need the rent as income, you may want to consider reducing their rent to help them out, even just temporarily, so they can get back on their feet. This shows that you are a property manager who actually cares about their well-being, which is rare. In turn, they may be more likely to tell their friends and family members about the positive experience they had with you and that you took the time to care about this situation. This would attract new tenants in, even after the current tenant moves out. Conversely, keeping the rent where it is and sending the vibe that you do not care about their situation would give you a negative reputation and turn tenants away from your property.

Reducing rent may seem counterproductive, but there are times where, in the end, it may actually help you retain tenants and even draw in future tenants based on your reputation.

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