In the Ring of Investment Protection AN ANECDOTE ON RENT PRICING, PROPERTY MANAGEMENT, AND ASKING THE TOUGH QUESTIONS
by Brian Wojcik
ow hard can it be?” a prospective client for my former property management business asked. “Well, it really depends on…” I started. Before I completed my sentence, he couldn’t help himself from throwing another jab, trying to get me on the ropes. “Depends on what?” he interjected. He was setting me up for a knockout blow to show he knew more than I did. At least he thought he was. But I was ready to counter. It depends on how well the property is positioned against the others in the market, how clean it is, how well it’s maintained. That impacts pricing, and how well it compares to competitive properties, which of course assumes knowledge of the market and competitive offerings. It depends on the financial strength and position of the owner, to ensure the lease terms account for those considerations.
Rent pricing is a combination of art and science. Have you researched nearby vacancies to make sure you’re getting top dollar? How easy is it for a prospective renter to inquire, prequalify, and apply? If good systems are in place, the lead-to-lease ratio will indicate if something is amiss. At this stage, the renter application and evaluation of that renter as a candidate is critical to getting a signed lease. This, of course, depends on how well the screening is done. Experience teaches how to check references, what questions to ask, and what documentation is required to send to those who are not accepted. Before he can get a word in, I continue. By the way, it’s important to know which questions are legal to ask and which are in violation of Fair Housing laws. It’s possible your “prospective renter” is auditing you for discriminatory practices. Assuming you get the
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