After the initial stages of comparing one's property to those in the surrounding area, and assessing an approximate rental price based on location and amenities, a property owner must then adopt a strategy to attract potential applicants.  Below is a description of the advantages and disadvantages of having a lower, middle-range, and higher end rental price. 

Lower End

Having an inexpensive rental price will attract more applicants, which allows an owner to be selective about potential tenants.  However, the property owner must make an accurate assessment of the property's amenities and ensure that the rental price matches the cost of ownership.  Setting a monthly rent that is too low may result in a loss of annual rental income and it may attract questionable or unreliable applicants.

Middle-Range

A middle-range rental price will still attract a large number of applicants while also whittling away those who may have unreliable or sporadic sources of income (i.e. tenants who may not be able to pay rent on time).  Many property owners are unaware that renting quickly and at a slightly lower amount is more profitable than waiting a month (or more) for a potential tenant who can afford a high amount. 

For example, say an owner wants $1500/month and is unable to find any prospective tenants.  If he keeps the price where it is, he will lose a month's worth of income with no guarantee that the vacancy will be filled in the following month.  It is better for this individual to lower his asking price to $1400/month, which will result in more applicants and the ability to rent the unit out sooner.  This makes financial sense in terms of yearly numbers:

$1500 x 11 months = $16,500
$1400 x 12 months = $16,800

The larger applicant pool will also allow an owner to select a higher quality tenant.  This means that the condition of the property will be better maintained and the individual will stay longer.  A responsible, long-term renter will result in less costs associated with finding new tenants and less wear and tear on an apartment.

Higher End

A higher end rental price will attract individuals with considerably more disposable income.  However, an owner still has to be careful about his eventual selection since an initial impression is not always indicative of a renter's reliability.  Appropriate backround and credit checks should be done before renting out a higher priced property. 

The disadvantages associated with higher rents is mentioned above.  An owner must be prepared to have his property lay dormant until an ideal candidate comes along.  However, if a property owner is able to find someone who is willing to pay a higher amount, then the potential profitability on this unit may be quite substantial.

Conclusion

A property owner must therefore be strategic when deciding upon their monthly rent.  This can be tricky for individuals who are new or unfamiliar with property management.  It is therefore a good idea to seek professional advice in the form of a property management company.  A good management company will reduce the stress associated with renting a unit on one's own.  Urban City Rentals offers such assistance in the form of professional property leasing and management services for properties in the Vancouver, Richmond, and Burnaby regions.  We can help clients with setting asking prices and finding ideal potential tenants. 

For more information on the property management services that our company offers, please contact Urban City Rentals at 604-677-7369 or visit our webpage at http://www.urbancityrentals.com