Rental Property Pricing Strategies
Pricing strategies for your rental properties. And this applies equally well to buying more rental properties, putting in an offer to buy a property or even applies to selling your property. A few strategies we always employ and a few things we've come across would be to always use numbers like nines, sevens, and three. The reason why you comely see sevens and nines, it isn't just because it's one number shorter than the next number. It's that it takes the brain a little bit more work to process a difficult to process number. So if I give you a five, if I gave you a zero, you can quickly, very easily do the math in your head. If I tell you a price is $773.37, that gets a little bit more difficult for your brain to kind of add up.
The marketing strategy with that is that folks will abandon the concept of price when given a more difficult number to process, so they'll just move on. So you give them a price, they thinks about it for a second, moves on. That's the strategy. If I give you a nice even number, like 1000, you can very easily calculate 1000. There's also some evidence that having more syllables in the number has some effect, but that sets a small trace amount of benefit. It's really not worth going after.
The other pricing strategy that drives me nuts, and we're actually buying a new car, and the trade-in value came in at exactly even number. They're basically offering $12,000 for older car, basically just giving a nice even number saying, "Hey, we did the Kelly Bull book, and it says that your car is worth exactly $12,000." And you're like, Really? Exactly $12,000?
We always use precise numbers. So if I told you I want to buy your house for $100,000, you know that I'm willing to pay just $100,000. It's a number that I'm guessing at. It's just the number that I'm comfortable with. If I give you a price and say I want to buy your house for $99,137, you know I have a reason, you know I've crunched some numbers on my end and I have some kind of foundation I'm standing on as I'm approaching you with this price.
So with the initial $100,000 offer, you know I would likely spend only $100,000 is a base rate. I might be willing to spend more or less. If I should give you a precise number, again, I'm basing it on something and that basis might actually have some validity to it.
We commonly use are threes and sevens with all of our rental prices. Therefore, it's never 17,000, but rather 17,037 or 1700 - 1,737, and we have seen great success with that. Also, always give a very precise number as well, even down to the cents. If you were to give me a offered to buy my home for a million dollars and 32 cents, my first thought's going to be like, "What's up with the 32 cent?" There's got to be a reason why this guy's coming at me with 32 cents. Good luck!!!