Are you comparing apples to oranges?

Not too long ago I had a tenant call me and tell me that the apartment they were living in was "waaaay" overpriced and they would either like to have the rent reduced or they will move out. So, I sat there for a moment wondering if I had made a mistake in my research on pricing vacant units. So, I decided to look into it again to triple-check my work.

After a couple of hours online, making some phone calls, analyzing data etc I came to the conclusion that the tenant was in fact incorrect. I don't know about your particular area, but in Los Angeles prices on apartments vary widely from one block to the next. With all my research organized in charts, I finally called the tenant back to explain to them that the apartment was in fact priced correctly.

Too many times, people just look at the title of an advertisement for an apartment, for example "Beautiful 2+2 upper unit apartment in Los Angeles, available immediately! - $1100.00/mo". They forget the importance of size of the unit, amenities etc. I was researching the market rent for a 3-bedroom unit once and I came across units varying from 1000 square feet (!) to 2200 square feet. Needless to say one will cost more than the other.

I also found that a lot of times in advertisements people tend to use the name of a neighboring area that may be a "better" neighborhood to attract people to their listings. I actually went ahead and got a map of Los Angeles and placed pins for the location of each property that used as a comparable. I was astonished to find out that some of the units advertised as being in a certain area, were in fact about 6-7 miles (!) away from my apartment building. I don't know about you, but that irritates me. The apartments I used as comps, were all within a 1.5 mile radius.

As an additional precaution, I also called a local rental agency to get their take on the pricing in the area and the number they gave me also waaay off. I asked them to send me the comps they used and when I reviewed those, I found out that all properties used, where nowhere near my building. And I remember specifically being asked the city and zip-code of the subject property.

So, all I am trying to say is that not everyone out there is doing their detailed analysis of the area they are in and that may cause confusion. You may be loosing out on good prospective and current tenants that believe your price is too high. That's why I made my research charts, notes, maps etc a part of my Leasing materials. I make a point of showing current and future tenants. what they are looking at out there. I want to make sure they are comparing apples to apples.

I hope you are doing your homework, before going out there and trying to lease an apartment.