As a landlord I am very fortunate to have a property in a really nice sought after area where rental property doesn’t come on the market often. So when a property does become available it gathers a lot of interest.
I found myself in a situation recently where I listed my property online and in one week had about 40 enquiries! Of these enquiries I managed to whittle them down to 15 prospective tenants and invited them all for a viewing. In the end only about 10 of those actually turned up.
In my opinion, having 10 separate parties interesting in renting the property is amazing!
Being able to meet all these people gave me the chance to interact with them and ask them questions to give me an insight in to whether I wanted them to rent the property. Importantly it also gave them a chance to meet me and ask me anything they like.
Eventually I ended up with 4 separate people who wanted to rent the property.
Now I was in a pickle.
I know what you’re thinking. Why is having several interested people a problem? I should be thankful etc etc.
The problem for me was who to pick? They all seemed like they would be decent tenants and I had to make the right choice.
Now I want to tell you that I made them fight over it like farmers at a cattle market bidding on the biggest cow. But I didn’t. Eventually I made a business decision and chose a great couple who posed minimal risks. It’s a business after all.
But due to massive demand in rental properties I have noticed an increase in tenants offering more money for a property and landlords capitalising on this by having people “bid” on the property. Even agents are holding open days and auction style bidding for properties. It’s like real life eBay.
The biggest benefits for landlords holding open houses and bidding is:
- Achieve higher rents than initially advertised
- Completing viewings and finding a tenant all in a couple of hours
The benefits to tenants are:
- Finding premium property in a nice area (perhaps close to good schools and amenities)
- Knowing you’re in an amazing property that loads of people wanted
This is all a bed of roses so far, but what are the downsides to this?
Negatives for landlords:
- Higher rent means higher risk of tenant running into arrears
- That’s about it…
Negatives for tenants:
- Having to pay a higher rent
- Fighting for a property – It’s an awkward situation that nobody wants to be a part of
Is there also an ethical downside to this? Consider the following:
As a landlord I can achieve higher yields and find great tenants with minimal time and fuss.
Sounds great! Now what about the following:
As a tenant I feel like I’m being pressured in a bull-ring style viewing to bid higher for a property against other people.
Take from it what you will and draw your own conclusions. A point to remember is that property rental/lettings in general is a business and should be treated as such. And remember…
A property is worth what people are willing to pay.
Are you a landlord or tenant and have held/attended an open house or rental auction before? What was your experience like? Let us know in the comments!
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