There are a variety of situations in life where negotiating on prices is a worthwhile idea. As a landlord, it is not uncommon to have tenants approach you with the request for a lowered price on rent. For many landlords, this puts them in a strange situation. Should they say yes and provide a lowered rent price for an applicant? The answer is more complex than a simple yes or no. Read on to learn more about how you should handle rent negotiations.
Negotiation Versus Lowering Your Rent
The first thing to note is that there is a difference between rent negotiation and simply lowering your rent price. The first involves a tenant asking you for a different price than the one listed, the second occurs when you determine your property has been on the market too long and you decide to lower the price.
It is not necessarily a bad idea to come down on your rent price in certain situations, but negotiating your rent can be troublesome.
Avoiding Accusations Of Discrimination
The number one risk you take when you decide to negotiate rent with an applicant is the accusation of discrimination. The following example demonstrates how rent price negotiation can go wrong.
Let’s say a family comes to you and asks the price for the rental. You inform them that the rent is $1,200. The family states they cannot afford that price and they move on to look for other options.
The property remains on the market for a while. Next, you show the place to a single person. They ask you about the rent and you tell them the same, $1,200. The single person says it’s too high, but he’ll give you $1,000. You think about how the property has been sitting vacant and how this guy seems like a perfect fit, so you decide to accept the negotiation and lower the price.
Unfortunately, unbeknownst to you, the family ends up finding out that the single guy got the property for $1,000 when you told them $1,200. They decide you discriminated against them due to their family and you find yourself facing a lawsuit for familial status discrimination.
Lower Your Rent Prices Fairly
The above story isn’t to say that there isn’t a time and a place for changing your rent price. If you have a rental on the market that is sitting vacant, it might be time to lower your rent price. The best way to handle this is to make a price change that applies across-the-board to everyone.
Your best option is to update the price of the rental on any website listing and flyers. Additionally, it is wise to call interested parties with the new price. In this way, everyone will be aware of the price change, and no can accuse you of the price change being part of a discriminatory practice.
You can adjust the rental price across the board, just don’t adjust it for specific people.
Improve Your Marketing Before Lowering Your Price
Although there are cases where lowering your rental price is a good idea, often the first thing you should do is improve your marketing. If you are only listing your property on one or two websites, consider using a free rental marketing tool to list your property across dozens of websites at once. By marketing your property in more places, you can increase the number of applicants interested. Make sure your property listing is attracting potential applicants as well. Add high-quality photos and ensure the listing is easy to read and highlights the best features of your property.
DISCLAIMER: Turbo Tenant, LLC does not provide legal advice. This material has been prepared for informational purposes only. All users are advised to check all applicable local, state and federal laws and consult legal counsel should questions arise.