It’s very annoying when you know the other agent down the road has quoted a rent amount way above what the market is doing!
The reasons are varied but sometimes they’re just quoting it high to get the business. And you can see the prospective client is tempted by this information.
How you ‘come back’ with a suitable answer will determine whether or not you get the business.
Here are 12 different ways you can approach it.
These were collected on our Facebook page with competition asking property managers for their best script. Thanks to everyone that participated.
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Now for the 12 ways to overcome “But the other agent will get me a much higher rent!”
Really? They said they could achieve that rent? Wow, at what cost? I suggest you go with them! It’s pointless me being here now but, I’ll tell you what though, take my card, give me a call when you have exhausted all avenues of finding a quality tenant. The only tenant this agent will find is a tenant that has no intention of paying any rent. Anything that seems too good to be true generally is. I don’t set the rental figure the market does and your prospective tenant’s feet are doing the walking.
Mr/Mrs landlord, I understand that you want the very best return possible for your property in today’s market. I also know that for every week your property remains vacant you lose approximately 2% of your yearly rental income. Some agents quote high to win your business and then work you down over the next 4 weeks (or however long it takes) until they have leased your property at fair market rent. I think we can both agree that you cannot afford to lose between 10% to 20% of your yearly rental income (once you factor in the vacancy period and your agent’s fees). We do not believe in growing our pockets by risking the performance of your investment.
Yes, and the most desperate tenants will probably pay a rent rate greater than the market rate. Make sure you purchase quality Landlord insurance because in most cases this arrangement will likely not end well. The worst tenants don’t mind what they pay to secure a property. And they won’t pay at all!
Oh, that’s fantastic – have they given you a written guarantee with that because that’s not what the market is telling me. Can I take you through some practical figures so we don’t see your property on the market for months at the wrong rent?
~Rachel Ned MacLeod-Paterson
No agent can guarantee what rent you will receive as the rent market forces will determine that. There is x number of properties similar to yours on the market, that effectively is your competition. I would be more than happy to try the other agent’s price, but put yourself in the tenant’s position. Would you apply for a rental property that is priced higher?
The return on your investment is not determined by higher rent, but by the property not being vacant. So if you like, we can try the other agent’s price and risk being vacant for several weeks or price it so that it gets rented as soon as possible, which will provide you with your cash flow to pay the mortgage. What would you like to do?
It’s a fine line between achieving premium rent and having your home sit empty for 6 weeks waiting for a tenant prepared to pay that price. The best tenants, the A-grade ones are not going to pay more for your home when they see other homes they consider to be equivalent for a lower price. By pricing yourself above your competition, you are unlikely to have the best tenants inspect your home as they can get any home they want and they won’t want to pay more.
I know that some agents aim high then end up either reducing the rent or with long vacancy periods. I have prepared a CMA of other properties in the area and you can see here the first listed price, reduced price and only days on market of some properties. This is the standard of research we do and want to help you get the best return possible on your investment. $20 a week in rent reduction over the course of six months is less than two weeks rent and easily made up when we secure you a great quality tenant sooner
The other agent has told you that however, I am confident you are not likely to get that rent based on the current market comparisons. Would you prefer to lose $600 a week while the property sits vacant or reduce your rent by $20 a week to rent it quickly?
Oh wow, really? Do they give a guarantee for that rent? I would love for your property to receive that amount of rent and I know you present your house very well. Unfortunately, in the current market, it is not going to and I can show you why.
Oh really? How did they arrive at that figure? Can you show me a print out of the ads of comparable properties they researched and let’s go through them together and see how they really stack up? Tenants are no different to buyers – they are comparison shoppers. They are seeing up to 8 properties a weekend, and are gravitating to value. Now let’s look at the time these have been on the market and the price adjustments that have been made during that time.
The other benefit of correctly pricing the property means that you have a greater chance of multiple applications and you get to choose the best fit for your home. That in itself brings a great deal of peace of mind and minimises the cost of vacancy.
A sneaky one is “Does your current insurance cover you for an extended period of time when your home is vacant?”
Another is “The longer the home remains vacant the more it will cost you by requiring additional cleaning, maintaining your garden, leaving power connected etc…, so it’s not just the rent you are missing out on.”
I am pleased you asked us to also give you a market appraisal, I certainly appreciate the opportunity. I also would like to tell you that you could achieve that rent but it would not be true. Our aim is to achieve the maximum return with the minimum vacancy and a quality tenant for your property. Is this the outcome you are looking for?
You don’t know if they will get that rent, they have just given you a price. Whether or not they achieve that price is another story. It’s a common tactic agent use, quote a high rent and win the business – and look, this tactic has worked on you! I might be telling you a lower price, but I’m being honest. Do you want someone you can trust or would you prefer to potentially waste a few weeks trying to get a higher price that isn’t achievable?
At a lower price, you may also get more applications, which means more choice. Don’t you want to CHOOSE the best application, or are you happy to just take whatever you get because you are desperate after sitting on a vacant property for a few weeks?