There are many first time and novice investors out there who hole out for the highest rent possible before they let their rental property. This can usually result in the loss of many weeks rent and therefore money coming out of their pockets. One must wonder how wise a move this actually is.
The more savvy investor, one with a little more experience, always looks to the best way to maximise their profits. Investors report that the best way to achieve this is to keep the property rented, little or no vacancies.
In certain markets this may mean a lowering of the rent in order to get someone into the property. Deciding when to lower the rent is not always an easy decision, it is always tempting to “hold out for one more week”, then another and another. However the figures in putting off lowering the rent can actually be worse than dropping the rent, for example if the property is never going to secure a tenant at $300 a week, then losing a possible $270 a week while you are waiting for the $300 a week tenant adds up each week. It could ultimately cost you more to wait for the $300 a week rather than rent sooner at the $270.
Many investors tend to apply a rule to their rent. If the property has not been rented by the tenth day then the rent is dropped by ten percent. With the rule in place you will not have to make the decision when the time comes it already has been made.
Add to del.icio.us
