Why Getting Rent Right From Day One Matters

Date: 22 Jul 2025

Setting the right rental price from the outset isn’t just about market appeal—it’s a financial strategy that can make or break your investment returns. Yet time and again, landlords fall into a common trap: pricing too high to “test the market,” only to find their property sitting empty while income slips away.

Let’s unpack why pricing at fair market value from day one is crucial—and how overpricing can cost far more than you might expect.

The Greed Penalty: Starting High Often Ends Low
Business owner Graham Viall explains that the instinct to start high, based on the logic that "we can always come down" often backfires. It’s a human impulse to want the best possible return, but when applied to rental pricing, this tactic can result in longer vacancies and diminished perceived value . The issue? You only get one shot at the full market. When your property is first listed, it’s exposed to nearly 100% of active tenants looking in that price range. If it’s overpriced, even slightly, those potential tenants eliminate it from their shortlist. And once eliminated, they rarely come back.

Listings Are perishable and the clock starts immediately. Tenants compare listings side by side. If the rent for your property seems out of step with similar properties, most won’t bother enquiring. As time passes, your listing becomes “stale.” Tenants begin to wonder, what’s wrong with it? Even if nothing is.

As weeks go by, the pool of potential renters shrinks. Roughly 5% of the market exits each week after securing a competitively priced property. If your listing is overlooked in week one, you’ll need to wait for fresh eyes to enter the market—a slow and costly wait.

The Math of Vacancy: What One Month Without Rent Actually Costs
Let’s say you set rent at $700/week but fail to secure a tenant for six weeks. That’s $4,200 in lost rent—more than you'd lose from charging $20/week below market value for the rest of the year.

Worse still, even if you eventually reduce the rent, the damage is done. Landlords often “follow the market down” in frustration, eventually lowering the price multiple times before reaching an acceptable figure, while continuing to lose income each week .

The Long-Term Impact on Your Investment

Beyond the immediate financial loss, a slow-to-rent property delays everything:

• Your next rent review
• Bond lodgement
• Income reinvestment
• Stability in your portfolio

The opportunity cost can compound quickly, particularly if you own multiple rentals or are juggling mortgage obligations.

What Smart Landlords Do Instead

The key takeaway is simple: price your rental fairly from the start. Here’s how to avoid the trap:

• Research local market rent (or work with a property manager who does)
• Avoid emotional pricing—price based on data, not personal expectations
• Monitor interest early—if you’re not getting enquiries or applications within the first week (or ideally the first viewing), adjust quickly
• Don’t let your listing sit stale—review and refresh it, or re-launch with an adjusted price if necessary

If you're working with a professional property manager, it's important to take their pricing recommendations seriously. They bring current market insight, data from comparable properties, and experience across hundreds of tenancies. While it might be tempting to push for a higher rent, especially if you're emotionally or financially invested in your property, remember: your manager's goal is to maximise your return by reducing vacancy and ensuring your home rents quickly to the right tenant.

Fair market value isn’t about settling—it's about strategy. Getting it right from day one doesn’t just help you rent your property faster, it protects your yield, preserves your asset’s reputation in the market, and gives you greater control over your investment timeline.

Avoid the greed penalty. Price smart, rent fast, and keep your income working for you.