Interesting scenario?I?ve never had that happen. Here?s a few comments though.
First, if I found tenants ?bidding? my rent up?.I would seriously wonder if I had set the rent correctly to being with.
Second, remember that renting to a tenant is not the same as selling the property. In this latter situation, competing buyers bidding a property up definitely makes you a beneficiary subject of course to a lenders appraisal. But tenants bidding the rental amount up puts the tenant in at a ?price? which lasts only as long as he pays, unlike a sale which is permanent.
Personally, my focus would be more on who is most likely to pay and stay?..rather than who will pay the most. Having said this, if I had 2 tenants of equal qualification and one suddenly bid more for my rental I would probably go with the guy bidding more.
What I have had happen is more than one tenant apply?which of course gives me the advantage of selecting the best one for me?.but so far I have not had a tenant bid more for a property. I?ve also had a couple try to talk me down.
Renters bidding on rental - Posted by Steve Heller
Posted by Steve Heller on January 23, 2000 at 08:51:54:
Hi everyone,
I own some rentals in a sellers market. I usually get 15 or 20 interested parties when these rentals are on the market. Once after I signed a contract another prospect offered $160 more per month for the property. I was tempted to let them have it for that price but didn’t since I had already signed a contract. Has anyone ever offered an opening rental price and let the prospects drive up the price?
Next time,or if you have other rentals in this area when advertising for rent don`t put in a rental amount.When you get calls and you are doing your prescreening,ASK what they can afford to pay, or what they are are they willing to pay a month no rules broken!
Re: Renters bidding on rental - Posted by jim rayner
Posted by jim rayner on January 23, 2000 at 11:25:15:
I would think that this approach would potentially set you up for a discrimination suit since it would violate the basic premise that you must rent to the First Qualified applicant that meets your documented criteria which must be equally applied to all applicants. i would however keep this higher offer in mind for the next available vacancy since clearly there are some who are willing to pay more. for example i have tenants that are paying 26% more for my current vacancies than are some of the existing tenants who just recieved a 20% increase in january. i make it part of my normal routine to keep my rents at the current market rate whenever a vacancy arises. in the props that i buy with below market rents i raise the rents slowly as the general conditions of the property improves. i usually take advantage of the vacancies to rehab the units then put them back on the market at the current rates. while this causes some concern for the tenants, its generally the tenants paying the below market rates who express the most concern and many have said they do not want their unit done over if it means paying the going rate. well for them it becomes thirty day notice to terminate time.