Feels great to leave money on the table

[mortgageman]

I`m thrilled to report I rented my condo five days after putting it on the market, especially since my ads started Sept 28 and most potential tenants were looking for Nov 1 leases.
What worked for me? I was dealing with people who were new to town and needed a place quickly. The interesting part was the negotiation of price on the rent. That`s right, I was willing to leave a small amount of money on the table even though it`s a landlord`s market. Haggling is a cultural norm for my tenants. I was pushing hard by originally asking $1600 per month plus utilities for the condo. My real target figure was $1500 plus utilities. By accepting $1450 (only $50 less than the figure I truly wanted to get) my tenants feel good that they got a deal. I left $300 in rent on the table over the six month lease but in reality I`m ahead $2150 before they even move it. How`s that? I avoided paying $1000 in carrying costs until Nov. 1st had I waited to get my full asking price. And I`ve got the $1450 rent for all of Oct even though the lease was signed Oct 4th. So really, what`s $50 a month in the big picture.
In short, don`t be penny wise and pound foolish if you can get a suite occupied tout de suite as they say en francais.
It`s a mistake I`ve made many times in other facets of my life.

 

[DonCampbell]

You teach a wonderful lesson here. Sometimes a small sacrifice can lead to big wins! Often beginning investors get caught up in the winning every battle syndrome where they never bend a knee in negotiations. People who do this often destroy relationships even before they could get started. You don`t have to win every down to win the football game.

As a long term investor, I applaud your decision to keep perspective on your deal, and imagine that, you rented a property in 4 days while others not as creative (or more stubborn than you) probably have vacant suites for 30 days or more costing them substantially more than the $50 per month you negotiated.

 

[PhilipMcKernan]

Thank you for sharing this. We all need reminding from time to time about this basic but fundamental concept.

I did this in Ireland when selling a property about 5 months ago. The realtor was telling me to hold out for 5k more and I was happy with the price and said no. The deal was done and about 2 months later the market started to drop. Prices have dropped in Ireland about 20% at least and it is so hard to sell a property and the properties next to mine with the extra 5k are not moving.

Take Care.

Philip McKernan.