Every landlord wants top dollar for their rental. That's understandable. But how you figure out what "top dollar" actually is matters a lot more than most owners realize.
The most common mistake we see is owners pricing off of what's currently listed for rent in their area. They pull up a few competing units on Zillow or Facebook Marketplace, see what those owners are asking, and price to match or slightly above.
Here's the problem. Those units haven't rented. They're still sitting there. If a comparable property has been listed for three weeks and hasn't found a resident, that price isn't market rent. It's a price that hasn't proven itself yet, and it might be exactly why it's still empty.
Look at what actually rented, not what's listed
At BTS Properties, we price based on comparable units that rented in the last 30 to 60 days. Same general size, same condition, same area. That's real market data. It tells you what actual residents were willing to pay.
A currently listed property only tells you what an owner is hoping for. Sometimes hope and reality line up. Often they don't.
The real cost of pricing too high
Overpricing a rental doesn't just mean it takes a little longer to fill. It creates a chain of problems that eat into the bottom line in ways that aren't always obvious upfront.
Vacancy cost adds up fast. On a $1,200 a month rental, every week it sits empty costs you roughly $280. Price a unit $50 to $100 over market and instead of renting in two weeks, it can take a month or two. That's at least $1,200 in lost rent, and you're still on the hook for utilities and lawn care the whole time, plus the risk that comes with a property sitting empty, like vandalism or someone breaking in and squatting. The math rarely works out in the owner's favor. The extra rent you were hoping to collect gets erased by the vacancy, and then some.
You attract a different, riskier pool of applicants. When a listing sits too long at too high a price, the qualified applicants keep moving and rent something else. What's left, week after week, tends to be applicants who are more desperate. Maybe they don't screen as well. Maybe they're in a tight spot and will take whatever they can get. Owners under pressure to fill the vacancy sometimes lower their screening standards just to get someone, anyone, signed. That's a decision that often costs a lot more down the road than the vacancy did.
Out-of-town residents sign, then leave after a year. This one catches owners off guard. An overpriced rental often ends up getting filled by someone relocating from out of the area, because the price doesn't sound unreasonable to them compared to wherever they're coming from. Peoria is a pretty inexpensive area to begin with, so almost everything looks cheap next to where they moved from. They sign the lease without really knowing what the local market rate should be. But by the time the lease is up, they've learned the market. Some move to a rental that's priced right. The financially responsible ones often realize they're overpaying to rent when they could buy, and end up purchasing a house here instead. Either way, that's a turnover, and turnover isn't free. New listing costs, another vacancy gap, cleaning, sometimes repairs between residents. You're right back where you started, except now you've also paid for a resident who never planned to stick around.
Our approach: at or slightly below market
We typically price properties at or just slightly below actual market rent, based on recently rented comps. That might sound counterintuitive. Less rent should mean less money, right?
In practice it's the opposite. A property priced right rents quickly, attracts a stronger pool of qualified applicants, and tends to keep residents longer because they're not going to find a meaningfully better deal down the street. Fewer vacancies, fewer turnovers, fewer surprises. Over a full year, that consistently outperforms a property that sat priced high and empty for weeks before someone finally took it.
Pricing a rental isn't about getting the highest number you can defend. It's about getting the number that actually maximizes what lands in the owner's pocket over the full time of ownership.
If we can be a resource as you think through pricing your own rental, don't hesitate to reach out. You can find us at btspeoria.com or give us a call at 309-431-2469.
