Well we did it. We LOWERED the rent for someone. And he didn't even ask. Are we crazy?

So he is a Coast Guard guy, one of our target tenant types. Brand new tenant, he rented our place sight unseen based on pictures.

The outgoing tenant left the place clean but not clean enough. There were multiple nail holes, screws and such to be removed, holes filled, paint touch ups. Dh was able to take care of that but the whole place in general looks a bit tired, that's the word both of us came up with.

Normally we have 24 hours to turn over a place, but in this case I had a court case on Friday that I had to attend (Guardian ad Litem thing) so we lost that time.

Plus It's March, no way I'm taking a place out of circulation for refurbishment at this time of year. And Tenant needs the place regardless.

That seems fair to both sides

At the end of a transaction most people say thank you. do they mean it - maybe not - but I dont say it unless I mean it.

I get a haircut I say thank you

Gal at supermarket does a quick checkout I say thank you

He knew what the rent was and agreed to pay it, yes Roy, but I think my pictures made it look better than it was. Because he had to take it sight unseen, I personally would have felt a little deceived had that been me. Although not my intent - it looked fine with furniture and decorations in place - but was just sad when empty. And somehow outgoing tenants broke a shutter and other issues that made the exterior look crappier than it should too.

I would have hired someone to paint the whole thing in one day for much cheaper than what you lowered and the new tenant got a newly painted place..

I've lived through three drastic drops is the real estate market. When the value of income property drops, so does the market rents.

From 1990 to 1997, apartment values dropped 50% and their rent dropped only around 10%. Better to lower the rent than to loose good tenants to the local competition.

Also from 2007 to 20011, values dropped around 40% in apartments and the rents only dropped 5%. In that case I stopped my annual rent increases and even discounted some tenants who paid their rents early.

I probably would have done that too. Sometimes the LL has to do something in good faith. Maybe the tenant will appreciate, and that goes a long way. Maybe they will not. But I am in the camp that we have live with ourselves and our decisions and for me a lot of that is based on how I would feel in the same position. True a lot of tenants don't deserve that, but plenty do.

Don't know what to say? maybe "I give up".

Customer Satisfaction is important in running a business, MYOB. This is a SMALL beach and people know one another. If this guy thought I did a bait & switch with him, he WOULD tell other people that - and as I said, Coasties are a target market of ours. We currently have 4 or 5 of them.

Would I rather have fixed the place up so it was WORTH $1200? Yes. Did we have time? No. So $600 spread over a year is no big deal to us - won't even notice it because it was already a raise, but it's a huge deal to a fresh-out-of-the-Academy kid still wet behind the years. He forgot to have his power turned on so he is sitting in the dark and cold this weekend! I bet his mother is beside herself LOL!

WMH and a few others--- run Forrest run!!!!! More excuses than Carter's got Liver pills!

You know what you sounded like? -- and please object if this is wrong? -- a tenant with excuses of why they can't do something. YADA YADA YADA YADA!!!!!!

Linda NY good faith? The guy never even asked for an adjustment?

WHM so let them talk-- you got a business to run and might I add to make a profit at.

Robert C she accepted and he accepted the rent. FACT is she has no idea if he'll pay or not.

Oh I could have left it at $1175, no doubt. Totally my choice not to - he wouldn't even have thought to ask for a reduction based on condition. But I take a little pride in our humble shacks...er cottages...and I get a way better class of tenant these days as a result - a la the Coast Guard.

Since we upped our game on condition, we've upped our rents considerably. This same unit rented for under $600 in 2013. We've not done much to it except paint and Allure back in 2014, and some new windows in 2016 when we had to spend some money.

This place just isn't up to our snuff right now, and we don't have time to get it there. It's renting for $1125. I'm okay with that.

MYOB, I do enjoy and learn from your posts and I'm okay with your having an opinion on my opinion or I wouldn't post it here LOL!

I think WMH you made my point for me. As you say in 2013 you were only getting 600 for the same unit. Yes and that was because as with all LL's the economy s***ed. So we all took less?. Now with the work out there humming along, people making money again, it's time to make up for our losses.

Let me ask you to do this. You say $25.00 more in rent or 300.00 year. --- I say you lost 900.00. You have devalued your investment-- do the gross rent multiplier on the difference and then the NOI figure just for the year.

To use our current president's loan application. When he places a value (as when we all do) the value isn't just the rent. It's the gross rent multiplier and thats at 120%. So we have appraised value to a homeowner-- yes we all agree-- but we have a value as a rental investment and that's way different then just the appraised value with bank financing. This is why investors explained there net worth-- rentals have more value as an income producing property-- then just living in a place. When the crooked news was discussing Trump's value he placed on his RE they mocked him for the 120% value on his investments -- folks that is the income producing value.

When i sell a property-- with owner financing do I sell at appraised value-- no I use the gross rent multiplier because why should a sell a property so someone else can enjoy the work I put in finding the property and developing it? That value is 20 to 25% more than appraised value.

We bought the unit in 2013. Former owner was way under market. We painted and Allured and raised the rent to $850, then $875, $900, etc. etc. etc. as rents went up. Without doing much more to it.

NOW that part of the equation shows. We haven't done much more and we should have. Sometimes you just have to suck it up and fix up your places again...and we didn't. I overcharged, the place as is is not worth the rent I was charging. Plain and simple really.

And yes he agreed to the rent based on my pretty pictures. Place is no longer so pretty in person.

I know you don't like long-term tenants, but Coast Guard guys stay 3-4 years, depending on where they are in their service when they come here. That's good for me.

myob, I recently asked a realtor if rental property was worth more and she said no. Confused me. I am glad you just posted what you did. Now I need to find the gross rent multiplier?

I realize you would not have lowered the rent but, given the time constraint to get the place ready, would you have just left well enough alone or what would your solution have been?

W,

“Rented now” is better than “on the market” and “we COULD get___”. Bird in the hand.

I push for max rents. But my goal is GET IT RENTED.

And $50 on $1200 is a minor concession - esp when the rent prices are subjective.

$600 over the year could easily be lost doing a DIY paint/upgrade or showings/screening.

Congrats on the $25 increase and the overall increases from $600 /mo.

6 BYE my solution would be to leave it alone. TRY to do as much as possible but from her description it wasn't bad. She set a price and he agreed after seeing the pictures. OK so the pictures weren't the best and I'm not trying to make excuses but you know -- she hasn't met him either. We call that 2 pigs in a polk. It is what it is.

To continue though. When signing the lease papers had any mention been made that the place wasn't up to prospects expectations--THAT'S WHEN THE "you know i'm not to happy with it either" let me make an adjustment of 20.00 off the rent or 25.00. We don't go whole hog 75 off at least in my book.

I tried to point out the NOI and gross rent multiplier and my math was questioned. $25.00 X 12 months is 300.00. 75 dollars times 12 months is 900.00. what you get VS what you should have gotten.

MYOB, I'm GETTING the $300 increase. I'm NOT GETTING the extra $600. If I spent as much stressing over that $600 as you have, I'd be crazy.

We signed the lease online a month ago, he paid deposit via Zelles, he paid first month's rent via Zelle before seeing the place.

use 120% of your rent will get you to the ball park figure of GRM

myob, I am sorry again for my confusion. When I looked online it looked like GRM= approximate number of years to pay off house. My rent is 900/month or 10800/year. If I use the annual amount of 10,800 x 120% = 12,960. What does this tell me exactly? Am I thinking the wrong way? Thank you for your time and help.

myob, I forgot to ask, how did you and the President and others come up with 120%.

Elliot - How would you have gotten someone to paint the whole place for so much less?