How To Price
We do NOT just pick a price. We use a pricing method in our advertising.
Assuming the home is presentable AND the pictures are good the only thing left you can control is the price.
(if the home is not presentable or the pictures are not good fix those things first).
We start by asking a little higher rent than we think it is worth. On about a weekly basis we assess and, if necessary, reduce the rate until we start getting about 8 prospects per week. THIS IS MORE IMPORTANT than merely picking a price and trying to get it because this method is how to balance the most rent you will get while minimizing the vacancy time you have to wait.
In summary of below:
1) make your home presentable. Tidy and in good repair.
2) have professional pictures taken. We will provide a how-to for that in the future.
3) price the home properly. Nothing fancy, follow these steps.
You want about 8 people reach out to you per week (prospects). It doesn't matter if it is phone, text or email. Any more than 8 prospects and you may be priced too low. Any less than 8 and you may be priced too high. This is more pro-active and involved than people realize. It is NOT a set-it-and-forget-it thing.
Example: Base target rent of $1000/mth with a goal of finding a tenant in 6 weeks. Your real target is finding a signed applicant in 3 weeks but they may not move-in right away.
If you price too high it will be vacant longer than 6 weeks. If it is vacant longer than 6 weeks then financially you have already lost more money due to vacancy than if you had just lowered the rent.
*** Some applicants call every new ad so the first week may have a few extra. We recommend starting $100 higher the first week than you think it is worth and test it.
First, you need good advertising. This is 90% quality and appropriate photos. You only want about 1 picture per room and 2 or 3 outside pictures. You do not want more than about 15 pictures or people don't pay attention. You want to give them some information while leaving them with some curiosity. In fact they are less likely to call you if you have too many pictures than if you have too few (20+ pictures is too many and under 6 is too few). The idea is you want prospects to call you and make an appointment to view. If they call you AND they make an appointment AND they show up - they have less time to look at and view other properties. You do NOT want prospects to make their decision just by the pictures and information because the real result is that they do not make that decision at all due to information overload, they merely look at the next ad while they think about it. The properties that peak their interest, and get their time, are more likely to be viewed IN PERSON and thus a real decision to apply is made.
The other thing you need is to have the home in good showing form. Mainly clean, zero to limited stains and fresh looking wall paint. This is the most expensive task but it is effective form of maintenance and most effective.
In order to find a qualified applicant there is a trend of how many people view an ad, call/text/email, make an appointment, show up to the appointment, and finally make an application. Usually only 1 of 3 applicants are a good fit.
To get one applicant you often need about 150-200 ad views
8 calls (about 1 per 20-25+ ad views)
4-5 appointments
3-4 actually show up.
1 applicant.
Again, only about 1 in 3 applicants are a good fit.
Since you need about 3 applicants you need:
24 calls, texts or emails (450+ ad views)
12-15 appointments
9-12 actually viewings
3 applicants
1 tenant.
In a balanced market it "should" take a week or two to get 8 calls. If you don't then you are priced too high and you need to lower your rent. The sooner you make this decision the sooner you fill your property at the appropriate rate. Waiting longer generally does not get you more money. You "might" get higher rent but you have lost significantly more money in wasted vacancy time than what you gained. Do NOT chase the downward curve.
The middle of the month is slightly slower than the week ending/beginning. So the middle of the month might get 8 calls over 2 weeks and the last week gets 8 calls by itself and the first week might get 8 calls by itself.
This depends on the time of the year and the general market balance. See the chart on the bottom.
We try and get 8 calls in one week during the summer, in Alberta that looks like May, June, July, August and the first week of Sept. The rest of the year we try and get 8 calls every two weeks.
Dec/Jan is a 6 week extra low trend as people do not have the money to move just before or after Christmas. So middle of November to middle of February is best avoided altogether.
If the market is really bad or the weather is really bad you adjust the 1-2 week target up to 3 weeks. If it is a really good market then you can speed it up.
Note the price relation to when kids are out of school and the warmer weather. Also note that in December, just before Christmas, it is the lowest. And the second lowest is in January. People don't move before Christmas and rarely have money right after Christmas.
Target price note: your assumed base is $1000 but on average you are more likely to settle a little/negotiate and your real average is more likely to be $950.
Assuming the home is presentable AND the pictures are good the only thing left you can control is the price.
(if the home is not presentable or the pictures are not good fix those things first).
We start by asking a little higher rent than we think it is worth. On about a weekly basis we assess and, if necessary, reduce the rate until we start getting about 8 prospects per week. THIS IS MORE IMPORTANT than merely picking a price and trying to get it because this method is how to balance the most rent you will get while minimizing the vacancy time you have to wait.
In summary of below:
1) make your home presentable. Tidy and in good repair.
2) have professional pictures taken. We will provide a how-to for that in the future.
3) price the home properly. Nothing fancy, follow these steps.
You want about 8 people reach out to you per week (prospects). It doesn't matter if it is phone, text or email. Any more than 8 prospects and you may be priced too low. Any less than 8 and you may be priced too high. This is more pro-active and involved than people realize. It is NOT a set-it-and-forget-it thing.
Example: Base target rent of $1000/mth with a goal of finding a tenant in 6 weeks. Your real target is finding a signed applicant in 3 weeks but they may not move-in right away.
If you price too high it will be vacant longer than 6 weeks. If it is vacant longer than 6 weeks then financially you have already lost more money due to vacancy than if you had just lowered the rent.
*** Some applicants call every new ad so the first week may have a few extra. We recommend starting $100 higher the first week than you think it is worth and test it.
First, you need good advertising. This is 90% quality and appropriate photos. You only want about 1 picture per room and 2 or 3 outside pictures. You do not want more than about 15 pictures or people don't pay attention. You want to give them some information while leaving them with some curiosity. In fact they are less likely to call you if you have too many pictures than if you have too few (20+ pictures is too many and under 6 is too few). The idea is you want prospects to call you and make an appointment to view. If they call you AND they make an appointment AND they show up - they have less time to look at and view other properties. You do NOT want prospects to make their decision just by the pictures and information because the real result is that they do not make that decision at all due to information overload, they merely look at the next ad while they think about it. The properties that peak their interest, and get their time, are more likely to be viewed IN PERSON and thus a real decision to apply is made.
The other thing you need is to have the home in good showing form. Mainly clean, zero to limited stains and fresh looking wall paint. This is the most expensive task but it is effective form of maintenance and most effective.
In order to find a qualified applicant there is a trend of how many people view an ad, call/text/email, make an appointment, show up to the appointment, and finally make an application. Usually only 1 of 3 applicants are a good fit.
To get one applicant you often need about 150-200 ad views
8 calls (about 1 per 20-25+ ad views)
4-5 appointments
3-4 actually show up.
1 applicant.
Again, only about 1 in 3 applicants are a good fit.
Since you need about 3 applicants you need:
24 calls, texts or emails (450+ ad views)
12-15 appointments
9-12 actually viewings
3 applicants
1 tenant.
In a balanced market it "should" take a week or two to get 8 calls. If you don't then you are priced too high and you need to lower your rent. The sooner you make this decision the sooner you fill your property at the appropriate rate. Waiting longer generally does not get you more money. You "might" get higher rent but you have lost significantly more money in wasted vacancy time than what you gained. Do NOT chase the downward curve.
The middle of the month is slightly slower than the week ending/beginning. So the middle of the month might get 8 calls over 2 weeks and the last week gets 8 calls by itself and the first week might get 8 calls by itself.
This depends on the time of the year and the general market balance. See the chart on the bottom.
We try and get 8 calls in one week during the summer, in Alberta that looks like May, June, July, August and the first week of Sept. The rest of the year we try and get 8 calls every two weeks.
Dec/Jan is a 6 week extra low trend as people do not have the money to move just before or after Christmas. So middle of November to middle of February is best avoided altogether.
If the market is really bad or the weather is really bad you adjust the 1-2 week target up to 3 weeks. If it is a really good market then you can speed it up.
Note the price relation to when kids are out of school and the warmer weather. Also note that in December, just before Christmas, it is the lowest. And the second lowest is in January. People don't move before Christmas and rarely have money right after Christmas.
Target price note: your assumed base is $1000 but on average you are more likely to settle a little/negotiate and your real average is more likely to be $950.
