Every landlord wants the highest rent possible. Fair enough, it’s your investment. But the highest asking rent and the highest return are not the same thing, and the gap between them is where a lot of owners lose money without realising it.
Here’s how we think about pricing a rental, and why the number that feels too low is often the one that earns you more.
The maths landlords miss
Say your property could realistically rent for $600 a week. You decide to ask $640, because why not aim high.
If that extra $40 means the property sits empty for even three extra weeks while you hold out, you’ve lost $1,800 in rent you’ll never get back. To claw that back at the higher price, the tenant would need to stay and pay that premium for nearly a year, and that’s assuming a tenant agrees to it at all.
Vacancy is the silent killer of rental returns. An empty property doesn’t earn a discounted rent. It earns nothing.
Why overpricing backfires
When a rental is priced above the market, a predictable chain of events follows:
- Good tenants scroll past it. They know the market and they know when something’s overpriced.
- Enquiry dries up, so you get fewer applications and less choice.
- The listing goes stale. A property that’s been advertised for weeks starts to look like there’s something wrong with it, even when there isn’t.
- Eventually you drop the price anyway, but now you’re negotiating from a weak position with whoever’s left.
You end up at market rent regardless, just several empty weeks later and with a smaller pool of tenants to choose from.
How we actually set the number
Pricing a rental well isn’t guesswork and it isn’t just copying the place next door. We look at:
- Genuinely comparable properties currently leasing in your suburb, not last year’s figures. Rents move.
- What’s actually leasing versus what’s just listed. An asking rent means nothing until someone signs. We look at what tenants are really paying.
- Current median rent data for the area as a baseline, then adjust for your property’s specific condition, features, and position.
- Time of year. Rental demand isn’t flat across the calendar, and the right price in a busy period isn’t the same as in a quiet one.
The goal is the highest rent that still leases quickly to a quality tenant. That’s the number that maximises your actual return, not the biggest number we can put in an ad.
The tenant quality trade-off
There’s one more thing overpricing costs you that never shows up in a spreadsheet: tenant quality. Price it right and you get choice, which means you can select a tenant with a strong record who’ll look after the place and stay. Price it too high, wait too long, and you’re often tempted to take the first application that comes just to stop the bleeding. That’s how landlords end up with the wrong tenant in the property.
Getting the rent right isn’t about settling for less. It’s about earning more, sooner, from a better tenant.
Our take
The right rent is the one that gets a great tenant signed fast and keeps them. We’ll tell you what that number honestly is for your property, even if it’s not the number you were hoping to hear. That’s more useful than a figure that leaves your property sitting empty.