In a previous post, you mentioned that you try to obtain the highest rent possible when you rent to new tenants. I do the exact same thing.

I do have a few questions for you. Do you get any resistance from applicants on quoting the higher rents? What justifies your higher rents? Do you get better qualified applicants with your higher rents?

I am in the finishing stages of my latest rehab house which when done will be one of my 'Cadillac houses' and I expect to get above market rent for it. When other LL's ask me what it will rent for and I say $750.00,...their reply is "You will never get that amount in this neighborhood". My stock answer is: 'Watch me'

In this neighborhood, rents range from $450.00 - $550.00/month for the typical junky looking 3/1 house. Right now, I have the best looking 3/1 house on the block and the interior will soon be decked out to the max. The real question is: just how much more rent will my future tenants pay for this jewel?

I don't try to justify rent, because when folks come view our (clean, updated) spaces they almost always say, 'This is way better than the other stuff we've been looking at in this price range.' Enough say it that when we get a few "want to bargain" folks, I just say no.

But I've had to combine what I want with the reality of what people in my area make. I've hit my personal ceiling at about $1200/month right now, regardless of size of space. Much more and I disqualify way too many decent tenants. For instance, NO teachers in this area qualify for that rent if they are single.

Much less, though, and I get all kinds of riff-raff applying. I get enough as it is.

There are many houses available in our area for $1250+ (sometimes ++++!) But no decent ones at $1200 or below, except me. Especially pet-friendly housing.

It's harder to justify a big increase to an existing tenant, so that's why I do it at turnovers and push much higher than I would to an existing resident. For existing tenants we go max $25 per month, at turnovers I've gone as high as $150-$200.

WMH,

Thanks for the compliment on 'curb appeal',..it is one my tools I use for attracting tenants who can pay the higher rents. Without doing any advertising, I get people on a daily basis asking me if I plan to rent or sell this house.

My stock answer is: $65K cash for the house and $750.00/rent.

Like you, I have to face the reality of what I want and what people make in the area. It does take longer (an extra week) to find the tenant who brings home the required 3X rent to income. But I tend to get applicants with career type jobs instead of the Walmart employee crowd.

One more thing,...since all Class C tenants understand/worship their automobiles,...I classify my rental houses as either 'Cadillacs or Chevrolets' which is something Jeffrey taught me to do in 2011. Since this house has the Garage Apartment in the rear,...now I have both a Chevrolet and Cadillac on the same lot!

Roy what would be the residence you refer to? The price is advertised so they know the rent? To me you have a rental advertised and it should be in a condition that allows you to ask the best and highest price. This is one reason we don't do the "CLASS" thing. All our properties are "A" no matter what neighborhood there in. They may be in a C hood but it's an A in the C area. (if you follow me)

Ken/NY, because he is also raising the bar on CONDITION and many LL's would rather just be "good enough." We had that mindset in the past ourselves, and found ourselves with "good enough" tenants rather than excellent residents.

Who among us does not make their selection based on many factors, price being but one.

Roy,

I appreciate W's comment about topping out at a certain price level. We see the same thing. I call it Strata like the layers of rock.

Those critical other LLs: most don't have a clue, are stuck in the 90's, or keep their rents lower to attract more people.

We make our homes super clean, smelling great, and updated colors (Repose grey baby!), carpet free, and updated appliances. My only real competition is the new apts.

Rent on!

WMH,

Oh Roy it is totally location!! We are extremely isolated in a very desirable location. Lack of ANY long-term housing here is at critical mass...we often talk about our dumb luck of stumbling onto this area. It won't last, the developers are coming :( BUT they are building the $$$$ units.

We probably have WAY more cash tied up in ours than you do. We envy you your $5k houses, even your fixed up $65k houses, because that is our starting price before fix-up, if we are lucky.

WMH,

Yes, that would be an interesting conversation assuming we can compare apples to apples,..if that is even possible. You probably have the apples and I think I have mostly lemons which I make lemonade out of,..LOL.

ROY your now getting into the "dog ate my homework" phase. He gets 1200.00 because that's the worth of it. With that worth let's all agree it COST more to buy and has more EXPENSES/taxes/insurance.

Yours rent for 750.00-- why because that's the worth of it for your area.

WHM outlines it perfectly in his 1258 post. He's right on with the eval. So please ROY stop the whining---.

WHM - Even though I buy properties dirt cheap, I do spend more on rehab than most other landlords. (This is the reason I have to buy dirt cheap to begin with).

My numbers including all of my 18 rentals are like this: average rents are $645/month on a $30K investment (cost of house plus rehab).

The highest price I have ever paid for a rental house is $25K but that house only needed $5K in rehab . The lowest price ever paid was $3,000 and that was the rehab from hell. Again, they all tend to end up being $30K 'all-in'.

MYOB- I am not whining here, just telling it like it is. Care to share your numbers here?

First let me apologise to WMH-- didn't know he was a she-- but no matter it's all LLing to me- gender isn't a matter.

Roy not sure what numbers you want? My last purchase was in 2001 when I retired from my full time job. 80+ SFH's that have been reduced to 63. We have 5 mortgages left. Rent is 750 to 1300 but average around 900.00. "A" properties in any neighborhood they are located in. During the years (from 1986) we've refied and paid off with the refi's-- sold some with 100% owner financing and taken all back-- investors didn't have the stomuck for it. One wife of an investor was told that maybe in 7 or 8 years they'd make money-- she went ballistic-- got those 5 back. Our vacancy factor is three tenth's of one percent........

My employee's (2) and pay cash for everything. Owe nothing (well 5 mortgages) GIFTING

Roy what do I need cash for? paying INCOME TAXES?

Constant Upgrading--- constant new "things".

Myob,

Roy thank you. We feel the same way. Working 2 jobs my whole life-- til 51 from age 16. Now I kick back and read your fine posts (and others). Help when I can. I've enjoyed your posts as have many here.

MYOB,