Setting your rent can be a bit of a Goldilocks Paradox: charge too much, you turn off inquiries; charge too little, you compromise the performance of your
property. The right amount of rent will not only help you attract the right types of tenants, it also ensures the continued success of your rental
portfolio. We asked five APIA investors to share their rent strategies and elaborate on the rental market/tenants respond to the rents they set:
John Priest
I use two information sources to estimate the “market rent” that I could charge for my residential properties. Number one is the Tenancy Services website while I also look at what similar properties are being advertised for on Trade Me. I review rents for current tenants annually and in my written advice
to them, I enclose a copy of the Tenancy Services market rent information for their area.
I favour rent reviews at the lower end of what I could achieve, that is around the lower quartile because this encourages stable tenancies. However, when
I do have a vacancy I tend to test the market, by the pitching the rent somewhere between the median and the upper quartile. I consider I have been
successful if I get good numbers viewing the property while getting only one or two serious applicants. Very occasionally I have had no takers at my
advertised rent level and have had to lower my expectations. It would be unusual for me to have a property vacant for more than two weeks between tenancies
unless I am redecorating or improving it.
