I have noticed a growing trend amongst some agencies to list their rental properties asking for offers over a certain price or offers between a price range.
While this practice has been widely used to market sales properties for as long as I can remember, it is uncommon for rental properties.
So why start now?
Well in the time it takes my barista to make my morning cappuccino I can usually find a story in the newspaper declaring a housing shortage, rental prices on the rise, building delays, families priced out of the market etc.
The headlines may differ but the message to property investors is that rental prices are on the rise, so if you want to cash in, the time is now.
In a market with limited rental stock and people competing for housing, by putting it to tender it can be believed that this strategy will achieve the best price.
Does it work?
I don’t think so.
Tenants have more information at their fingertips than ever these days, they know the market and are educated on what their rental dollars can get them.
Savy tenants will not pay over market rent for a property just because they can afford to.
By not being forthcoming on price, this creates confusion and can waste time negotiating over a price that is likely going to be market rent for a particular property anyway.
It gives the impression that the owner is only interested in the person who will pay the most and not the applicants suitability.
Personally, I find the practice a bit grubby.
Who benefits from this strategy?
Some agents may sell this to you as a tool they will use to get top dollar for your property.
It’s a bit sneaky because by doing this they don’t need to look you in the eye and tell you what your property is worth.
It’s used in the same way some agents tell you that your property is worth more than market rent so that you will sign up with them only to came asking for a price reduction a few weeks later when they can’t find tenants.
Now I’m not trying to ring my own bell here, but I believe I can tell you accurately what rent is achievable for your property.
I am not right all the time and sometimes I do get surprised, but it’s my job to appraise properties and see they are leased for the best price in shortest amount of time.
The rental market is literally my full-time job.
Getting the right price is only one factor of a successful leasing campaign.
It takes good marketing, thorough tenant checks and knowledge of the market to ensure your property is leased to the best tenants for the right price, with minimum days on market.
If you ask me what rental is achievable for your property, then I am going to give you an honest appraisal that is based on my experience and backed up by market evidence.
Good luck out there!