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I a US citizen living in the US looking to rent my Philadelphia condo unit. I put the listing on Zillow and had undercut neighboring rental listing to ensure I got tenant applicants, as I was nervous (as a first time landlord) that I would not be able to find any. To my pleasant surprise, I have received over 20 applications in 3 days. I have not yet committed to any one tenant, though multiple have already toured the property and expressed desire to live in it. This makes me feel as though I can raise the rent and still have interested tenants. The rent increase I am looking to make is somewhat substantial (~10%) but not ridiculous. My question is; can I do this? People who have already toured the place and applied are expecting a certain rent. People who are scheduled to visit also are expecting a certain rent. Is there a best way to do this to avoid people being angry? While 'more money' is obviously a good thing for me, it is not pure "there's a lot of demand, so let's be greedy and extract more money'; my initial undercut meant I was renting at a loss compared to the all-in mortgage. I would like to raise it to cover. If so, do I proactively reach out to those interested? Or simply provide them an explanation when they notice and ask?

Edit: This question has become somewhat moot as a prospective tenant has simply offered to pay more per month to gain priority selection after asking and being informed of the amount of other applicants applying. Surely, me simply accepting a higher “bid” has no ethical issues?

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    There is zero need to make excuses about "greedy" versus "renting at a loss". There is nothing wrong with charging the rent that the market and the law will allow, regardless of whether you have a large or small mortgage or none at all. Charging any less is giving your own money away, which no one has a right to expect just because they think you "don't need it". – nanoman Aug 27 at 23:16
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    As a realtor, I rented dozens of apartments. If one sparked great interest, it never would have occurred to me to bump the price. On the other hand, we knew how to price them, and didn’t need to ever accept less, either. – JTP - Apologise to Monica Aug 28 at 2:41
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    You should prepare for all of the people who already responded to you running away as fast as they can when they learn that you are the type of person to change the rules at any time. – D. SM Aug 28 at 5:14
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    If you were a tenant, would you sign a contract with a landlord that baits you with a low rent and then increases the rent? Signing a contract requires some level of trust: this landlord does not seem to be trustworthy. That said, you can always increase the price, see how all the current interested tenants disappear, and sign a contract with one of the new interested tenants that you expect to still come afterwards. – wimi Aug 28 at 11:37
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    Was there any charge to submit an application? This gets more complicated if so, since potential tenants will have paid you to be considered for a contract that you don't intend to offer. – Nuclear Hoagie Aug 28 at 13:21
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Withdraw it from the market.

If anyone asks, apologize and say that you severely mis-priced it, and you can't afford to rent it out for the original price. Most of them will say "I'm not surprised". Then say "I'm taking it off the market so I don't bait-and-switch people".

Don't tell them this, but part of the problem is with an underpriced unit, you may be attracting "the wrong crowd". Attracting the chintzy or worse, those who hope to take advantage of a novice landlord. Some of them are much better at this game than you are.

Next month, re-list it at the corrected rent.

This won't be a bait-and-switch because most people who are shopping for a place around this time need to move around this time. All the people you talked to will have found other situations, because selecting your place is not important to them; selecting a place now is.

Next month you'll get a whole new batch, and nobody will feel like you bait and switched them.

Also, consider getting a pro involved.

Landlording is harder than it sounds. There's a 2-volume set of just landlord law by Nolo Press. Honestly I got a little nervous when I heard you hadn't asked anyone for a credit check.

You may want to get a property manager or Realtor to help you manage the property. Someone who screens thousands of tenants. At least until you get a couple years of experience.

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  • I think this is a very good answer (kinda what I was gonna write). However if OP has to wait another month to be able to rent out their place that is 8% loss (over 12 months) right there. Something OP will need to weigh up. – DarcyThomas Aug 30 at 5:49
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Not a lawyer but this seems like a very bad plan.

What you're hoping to do here looks very much like a classic bait-and-switch scam. Advertising a low price to attract customers and then declining to offer the goods at that price is generally not allowed and could cause you significant liability. You'd need to look at Philadelphia's landlord-tenant laws and consumer protection laws to determine what liability you'd face and/or whether you fall under one of the law's exceptions. But it looks to this non-lawyer like you'd be pretty squarely covered.

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    What makes advertising a home for sale different, though? You don't have to sell to the first (or any) person who meets your asking price. Doesn't it happen all the time that after getting several offers, the seller asks those buyers for another round of offers (bidding war)? Moreover, in the rental setting, if you have 20 applicants and 1 property, at least 19 of them are going to have to be told they can't get the rental at the advertised price. Does it suddenly break the law if you tell all 20 that? – nanoman Aug 27 at 22:56
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    Aren't "bait and switch" laws aimed at consumer goods that a seller can be presumed to stock in "adequate" quantity, rather than unique goods like real estate? If a retailer's advertised price is supposed to be honored "while supplies last", does a single property even count as a "supply"? – nanoman Aug 27 at 23:00
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    @nanoman Bait-and-switch also applies to real estate, most commonly when a landlord or property manager advertises a low-priced apartment to generate interest, but doesn't actually have that unit available, so they'll show you another, higher-priced unit. This does seem close to bait-and-switch, although those generally advertise bargains that never really existed at all, while this revision of price is less obviously malicious. – Nuclear Hoagie Aug 28 at 13:39
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    @nanoman I'm not sure where you're inferring "first come, first served" from my comment - I didn't mention anything at all about what offers must be accepted, just that landlords can't advertise a lease they have no intention to actually offer anyone. A bait-and-switch doesn't require any offer acceptance at all. You can certainly choose to not lease to anyone you want, it's only a bait-and-switch if you plan to not lease at the advertised terms for anyone, and plan to sell them on a higher priced property instead. – Nuclear Hoagie Aug 28 at 20:47
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    @nanoman It's nothing like advertising a home for sale. To purchase a home, you submit an offer. When selling a home, you advertise a list price. When renting, you advertise details of the dwelling including the rent. Most crucially, when submitting a rental application, you do not choose the rental price (or other details of the forthcoming financial agreement) at which to submit your application. – Alex M Aug 29 at 5:14
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Small time landlord here.

I would say don't count your chickens before they hatch. "expressing an interest" is not the same thing as putting down a security deposit and signing a lease. I've had many people "express interest" who then ghost me. Finding an apartment is a lot like dating. These potential tenants might also have expressed interest in two or three other places. until you have a check in your hand you really don't know. I'd suggest stick with your original price and see what happens. If you do get it signed quickly, you can raise the rent the next time around.

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    What exactly do you mean by raise the rent next time around? When the current tenants renew the lease, or when new tenants move in again? In the former case, expect the tenants to be quite unhappy with a 10% rent increase in an economy with little to no inflation. Chances are they can't afford to stay and will leave, leaving the landlord with the costs of finding new tenants again. (In some parts of the world, a 10% rent increase for existing tenants would be illegal, I don't know if such rent protection laws apply anywhere in the US.) – gerrit Aug 28 at 15:16
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    @gerrit: Rent control exists in parts of the US. OP should consult state law and municipal ordinances to figure out whether it's applicable to them. – Kevin Aug 28 at 17:18
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    @gerrit , it could be either. I agree existing tenants may leave if rent was raised 10% at renewal. OP may not want the tenants to leave and thus do 5% increase. Or he doesn't care if they leave as 10% increase covers the trouble of finding a new renter. Either way, my main point is just a frame challenge to the OP that maybe his position is not as strong as he thinks it is. OP is first time landlord so maybe not reading it right. He might even have to LOWER his price to find a renter. But, if indeed his position really is very strong, then I agree with justin cove's answer. – Daniel K Aug 28 at 18:33
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If you haven't collected money from applicants or made any agreements with them, then they aren't harmed by you changing rent, in a legally actionable way at least. As comments point out, some people might view their wasted time as an incredible offense and seek to harm you. If you have collected application fees then you either shouldn't raise the rent or you should refund all application fees if the applicants are not interested at the higher price. Legally I don't see a problem assuming no harm is done to the applicants, but go ask a lawyer in your region to confirm.

Whether or not you should depends primarily on how much below market you actually went. If you listed 20% below market value, then people wouldn't be shocked if you indicated it was a listing mistake. If it's 5% under market value, you come across as someone who is trying to squeeze as much out as you can. Some grey between those ranges, but don't expect current applicants to stick around at a higher rate.

I consistently rent on the low-end of market value because I want a wide tenant-pool to choose from. High quality tenants that feel they are getting a good value are worth a lot more than getting the highest possible rent. You want a fair rent that you're comfortable not raising too significantly if your tenants are interested in renewing. That's my model at least, I'm happy to sacrifice some rent to keep turnover low and maintain high quality tenants.

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    "then they aren't harmed by you changing rent" - yes, they have been harmed, you wasted their time, they made contact or toured the property based on the original posted price. Assuming everyone else's time is worthless is a good way to have a brick go through one of your windows. – whatsisname Aug 28 at 18:20
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    First paragraph nails it. If a landlord takes money from someone under these conditions, it looks a lot like they have just accepted consideration and entered into an implied contract to proceed with the rental process under specific terms. – Z4-tier Aug 28 at 19:05
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    @whatsisname From a legal standpoint there's not an argument for financial harm as far as I can see. It is rude to waste people's time, it's not typically something you can sue over, and if you hucked a brick through someones window over it you'd be in the wrong. Still, best to only change rent in cases of actual listing errors in my opinion. – Hart CO Aug 28 at 19:11
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    "High quality tenants that feel they are getting a good value are worth a lot more than getting the highest possible rent" Bingo, and +1. My now-wife and I stayed in a quasi-shithole apartment for 10 years because through two landlords our rent never increased even as the market soared. We spent the last 4-5 years basically wanting to move but not willing to pass up the value. Meanwhile, the other half of the duplex went through tenant after tenant at market rate, going unoccupied a couple months each time, and our unit incurred zero maintenance cost and paid rent 100% on time. Win-win. – Alex M Aug 29 at 5:18
  • @HartCO These days, you don't throw the actual brick. You just ruin the wannabe-landlord's reputation on social media, or wherever he/she is advertising the rental. – alephzero Aug 29 at 14:05
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It is common understanding between civilized, honorable people that a promise is a promise. When you accept an application you make a promise. Namely, that unless the prospective tenant happens to meet certain defined disqualifying criteria, they will be given the right to sign on the exact terms discussed.

The person who submitted an application for a lower rent may not want to apply at the higher rent, so if you raise your asking rent without giving them a chance to sign at the original amount, you are wasting the time which they spent on your application. You have also made them submit confidential personal information on a false premise (that they would thereby gain the opportunity to sign a lease at the lower price). You could get in trouble here if the authorities decide for instance that you have no intention of renting at all, and are merely running a scam to collect personal information.

Typically an application also includes an application fee. This is another problem, as if the application is going to be thrown out that money is essentially being cheated out of the applicant. A particularly angry applicant (which they have every right to be given that this sort of sell-side price hiking is considered extremely rude and improper) may decide to sue you in small claims court for the fee. That will open the door to being sued for legal damages, time lost, and the local government further deciding to review your practices. Keep in mind that politically speaking, punishing shady landlord practices will likely be a popular move these days.

I would say that if you really want to raise your rent, you should at least refund the application fee to the applicants and apologize. You should also destroy the information they submitted and make this clear. There's nothing you can do about the wasted time, but hopefully none of the applicant will bother trying to get at you for just that. Also, carefully review the language in your application and your local laws, because it is conceivable that there may be local laws that require you to honor all applications received.

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    "unless the prospective tenant happens to meet certain defined disqualifying criteria, they will be given the right to sign on the exact terms discussed." That sounds like you think OP should have taken only 1 application at a time -- i.e., the second prospect should not have been allowed to apply unless the first prospect was already rejected, etc. With 20 applicants for 1 unit, 19 of them will have to be rejected no matter how qualified they are. So are you saying a wrong has already been done, entirely apart from whether the rent is raised? Are you saying that only if a fee was charged? – nanoman Aug 28 at 20:10
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    "there may be local laws that require you to honor all applications received." What could this possibly mean? OP can't lease 1 condo unit to 20 different people. – nanoman Aug 28 at 20:16
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I would very strongly recommend against doing so, especially during this pandemic, when evicting people for non-payment will be impossible for a long time. Rather, if you have a lot of prospective tenants to pick from, research them (Facebook, LinkedIn, etc) ask them for a credit report(or at least a Credit Karma screenshot) and choose the one that seems like a sure bet for not defaulting, i.e. they still have something to lose, like very good credit, or they have a job that is extremely unlikely to be cut, or they at least seem like a responsible, organized person. It's much better to have 10% less with a high level of confidence, because a good tenant is getting a great deal, than risk 100% less + risk of damage to the apartment. If no-one fits the bill, accept the temporary loss and keep looking, with maybe another 5% cut to stimulate interest.

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I'd say 20 interested parties is good, that allows you to look at non-monetary factors as well -- do they leave an impression on you as if they will take good care of things, do they seem like people who'd get along with the neighbours, so if someone goes on holiday, they will watch each others' houses to prevent burglaries.

You are still competing with other landlords for good tenants. A handyman might not want to pay as much as a hipster running a venture capital funded startup, but they will also complain a lot less about minor issues that are technically your responsibility but can be fixed in five minutes.

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Yes you can. Just tell them that there was a lot of interest and someone offered 9 % more than the advertised price and "if you offer +10 % you are first in the line".

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One option is to go ahead and increase the advertised rate on Zillow for any new contacts, but also send everyone who has already contacted you a message telling them that you will still honor the previously advertised price for them. Even so, many of those people could view this as a type of high-pressure sales tactic and run from that.

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