As a personal rental consultant looking for houses for people moving to Melbourne, I’ve noticed a few Melbourne rental property listings that comes with a price range as opposed to a set weekly price.
A 3 bedroom rental property in Melbourne that is advertised with a price range between $540 to $630.
Is this a trend or just a strategy?
I’m not sure if this is a burgeoning trend or if this practice is only endemic to the two rental agencies that lists their properties this way. So far, I have only found two who have been listing this way in the past few months and I am quite relieved that no other agency have followed suit. These two agencies are not the big players in the rental market and service the areas that are just on the cusp of inner and outer Melbourne suburbs.
Do you have to offer the top end of the range?
I’d like to convince myself that the determining factor is not all about money but about rental history. But it would be naive to say that money doesn’t talk. An application will most likely be viewed more favourably if it above the asking price, or in this case, on the top end of the rental range. Naturally, other factors will also be taken into account, especially rental history and ability to meet the rent monthly. However, to be realistic, the landlord and the agent will want to get as much money as they can for their investment so if a potential tenant can add a few dollars, it will definitely help. With the sale prices of houses and apartments continually increasing in Melbourne and Sydney, it is only natural that someone who purchases a house for an investment would want earn money from their investment.
Is Listing a Price Range a Bad Idea?
Personally, this practice of listing a price range backfires on the agency for two reasons. One, it indirectly says that they cannot determine the going rental rate of a property. It is their job to determine the price based on supply, location and demand and by checking neighbouring rentals of similar calibre. Secondly, it insinuates that a property is worth the low end of the range but they’re happy for anyone to pay $80 more per week if you really want to the house. I don’t think this will be a good start in a lessor-lessee relationship and it leaves the “winning” applicant a bad taste in the mouth. Obviously, this practice condones and breeds that deplorable habit of rental bidding wherein applicants offer more money for the listed price.
Possible Benefit of Listing a Price Range for the Agents
Maybe listing a rental property in a competitive Melbourne market is a good strategy. By setting a price range, the online advert will hit a larger group of people. If the landlord and the agent want to get a higher price but is also prepared to accept a lower price, this might be a strategy. But at the same time, doesn’t it feel like that the lower price is what the actual value is and the higher price is just being greedy? On the flipside, it could also mean the higher end is the actual price but the rental property is not in good shape that the landlord is prepared to accept a lower offer. Either way, these are not the impressions you want to be giving.
Benefits of Advertising a Price Range to Future Tenants
