NDLI: Residential Asking Rents and Time on the Market

Content Provider	Springer Nature Link
Author	Allen, Marcus T. Rutherford, Ronald C. Thomson, Thomas A.
Copyright Year	2007
Abstract	Landlords offering a house in the rental market face a difficult strategic pricing decision. The revenue maximizing decision for the landlord involves a tradeoff between the rental rate and time on the market. Because the turnover of renters is higher than owners, and because the landlord must bear some carrying costs on a vacant house, pricing the rent too high may decrease revenue due to a higher vacancy period and pricing it too low may reduce the revenue when occupied. While there is substantial research on the relationship between listed prices and time on the market for freehold interests, this is the first study to provide empirical evidence on the relationship between asking rent, contract rent and time on the market for single family residential rental (leasehold) property interests. We present two models; a rental price model and a duration model for time-on-the market. Using data from the Dallas–Fort Worth area we find that landlords who set a lower asking rent relative to predicted rent can expect a shorter marketing period for their properties. The results also indicate that overpricing the asking rent and then lowering it at a later date leads to a longer marketing time (after the reset) and often a lower rent. These finding are reasonably robust for low-, mid-, and higher-valued rental properties.
Starting Page	351
Ending Page	365
Page Count	15
File Format	PDF
ISSN	08955638
Journal	The Journal of Real Estate Finance and Economics
Volume Number	38
Issue Number	4
e-ISSN	1573045X
Language	English
Publisher	Springer US
Publisher Date	2007-11-10
Publisher Place	Boston
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Time on market Duration model Hedonic model Atypicality Residential rent Asking rent Finance /Banking Regional/Spatial Science
Content Type	Text
Resource Type	Article
Subject	Finance Urban Studies Accounting Economics and Econometrics

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1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
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4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
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