This process of adjusting the rent over time is an attempt to match the Asking Rent to the Market Rent. When these two numbers align, a well-qualified resident is sure to turn up quickly. For more details on Asking Rent vs Market Rent, please see the graphic below and watch this video: https://www.youtube.com/watch?v=TlWAuWxC1D0

We do not provide regular updates on the status of your listing; instead we outline what will happen in this document and let the system work. Our experience listing and leasing nearly 1,000 rental units in Phoenix has shown us that spending time communicating with potential tenants (instead of property owners) is the key to quickly securing a great resident. You will receive a weekly recap/listing report from our listing software Aplty every Monday.
Many factors affect the Market Rent for a given property/unit. Some examples:
Tenant Screening – Aloe uses a well-defined, set of criteria which has proven to reduce the chances of getting a bad tenant. This is not common (most landlords & property managers do minimal/basic tenant screening, if any at all).
Time of year property was leased – 4 season climates like Phoenix experience leasing cycles (our slower leasing cycle begins in fall and lasts through late winter).
Lease terms:
Utilities included?
Landscaping included?
Incentives, i.e. first month free, etc.?
Security deposit amount?

Overview of the showing and lease-signing process:

The property is listed for rent.
Leads (via phone, text message and email) are organized and followed-up with daily.
Prospective tenants who express interest in viewing the property are pre-screened, and if qualified, they will be granted access to scheduling a showing.
At or after the showing, anyone interested in the property is referred to our online rental application.
Once we receive a completed application (from all adults who plan to live at the property), including proof of income and rental history, we process their application and either approve or deny it.
If approved, an e-lease signing is scheduled.
Deposit must be paid within 48 hours of the lease being sent.
We confirm that the tenants have placed the utilities into their name and obtained renter’s insurance.

Effect of Asking Rent on Leasing:

If the Asking Rent is: The result is usually:
Above the market rent	· The property takes longer to lease
· Fewer potential tenant options
· Less desirable tenants inquiring
At the market rent	· Average time to lease
· Average potential tenant options
Slightly below the market rent	· The property leases faster
· More potential tenant options
· More desirable tenants inquiring

Why lower rents can lead to greater profits:

The primary goal of both you and our company is to maximize your return on investment (ROI). Sadly, 99% of property managers and investors believe that maximizing RENTS is the most important step towards maximizing INCOME. With rare exception, this tactic is the exact OPPOSITE of what’s needed to maximize ROI.

The first key to understanding this counterintuitive advice is this: vacancy is often the #1 expense of rental property. Particularly in areas with high competition and/or long vacancy duration, high rents are the kiss of death.

This is because the higher the rent, the longer a unit is likely to remain vacant, due to other options on the market that can be rented for less. It doesn’t take more than a couple extra weeks on the market to lose any extra income you may have obtained with a slightly higher rent.

However - did you know that higher rents also contribute to lower ROI in THREE MORE ways?

First, higher rents consume an even higher proportion of the tenant’s discretionary income, thereby creating an increased risk of default in the event of any interruption to the tenant’s income (illness or job loss) or unanticipated expense (car repair, medical bill, etc.).

Secondly, higher rents attract the WRONG type of tenant. Good tenants are frugal; they watch their money carefully, look for good value, plan carefully and have many options when it comes to housing. Irresponsible tenants are those most likely to overspend, make sudden, impulsive purchases (or leases) that might overcommit their income. This type of tenant also tends to be the type looking to move in “right away” (for a host of unfavorable reasons) and therefore less price sensitive.

Third, renter’s remorse generally sets in over time, as the tenant(s) learns that they are paying above market rent. This increases a tenant’s propensity to seek alternative housing, thereby at best eliminates the potential for renewal or at worst increases the risk of abbreviated tenancy. Both result in increased turnover and higher vacancy over the long term.

For those reasons, our company is aggressive about lowering the asking rent when necessary.