Why Landlords Should Consider Optimal Rent Over Maximum Rent
Why Landlords Should Consider Optimal Rent Over Maximum Rent
Chasing Maximum Rent Can Be Risky
When landlords bring a rental property to market, it can be tempting to focus solely on securing the highest possible rent. However, chasing the maximum rent is not always the best strategy. In many cases, aiming for an optimal rent – one that balances income with tenant quality and long-term stability – can deliver better outcomes.
The Highest Offer May Not Be the Best Offer
The tenant willing to pay the highest rent is not necessarily the most suitable. In fact, they may be overstretching financially just to secure the property. This could lead to issues with rent payments down the line, missed payments, or even the need for eviction – all of which carry significant cost, time, and stress for landlords.
Competitive Pricing Attracts Better Tenants
By setting a slightly lower, but still competitive, rent, landlords may attract a broader pool of applicants. This opens the door to selecting a tenant with stronger references, stable income, and a better rental history. Often, these tenants are more likely to stay long term, pay rent consistently, and treat the property with respect.
Optimal Rent Minimises Void Periods
Optimal rent also reduces vacancy periods. An overpriced property can sit on the market for weeks or months, generating no income at all, as well as incurring charges for council tax and utilities. In contrast, a well-priced property is more likely to attract attention quickly, minimising void periods and improving overall return.
Focus on Long-Term Value, Not Short-Term Gains
Ultimately, the best tenant is not necessarily the one who offers the most money upfront, but the one who can reliably meet their obligations over time. By focusing on long-term value rather than short-term gains, landlords can reduce risk, lower management headaches, and secure a more stable rental income – all by setting the rent optimally rather than maximally.
Our Results Speak for Themselves
This is the way we think about pitching rents and advising landlords at Western Lettings. Thinking is free, so how about results? With over one thousand properties under management, only six (0.6%) are in more than one month of rent arrears. And some of them came to us from landlords or other agents with existing arrears. This compares to UK average rent arrears rates in the private rented sector of between 5 and 10%.
