December 1, 2025 | 2 Minute Read
I recently saw a social media video from a well-known real estate investor suggesting that landlords should lower rent by 10% rather than risk having a vacant property. While this advice comes from a highly successful investor and educator, the reality is that the “right” strategy depends on your individual rental business and long-term goals.
Here’s what he said:
“You never want your property to sit vacant. It’s far better to charge 10% less in rent than to risk losing a reliable tenant. Keeping someone in place consistently is far more valuable than chasing higher rent. Price your rent about 10% below market, and you’ll ultimately make far more money.”
Of course I don’t want a property sit vacant but while that might work for some, I respectfully disagree.
For rental owners, the focus should be on cash flow and maximizing returns. I’ve owned hundreds of properties over the years, and I’ve never reduced rents below market—or skipped annual rent increases.
Let me explain why.
Recently, we purchased and renovated two houses, both four-bedrooms, two-baths. Our asking rent per door? $1,695 per month—the market max for the area. Other landlords were advertising similar properties at $1,450, but theirs weren’t renovated like ours.
Both properties sat vacant for two months before we received qualified applicants in the last week. Yes, you could say I “lost” $3,390 in potential rent, and because these are Section 8 tenants, certification added another month before move-in—bringing total lost income to $5,085.
But here’s the upside: by holding out for market rent, I’m earning an extra $245 per property over the competition, or $490 total per month. Doing the math, it will take just 10.5 months to recoup the lost income.
If either tenant stays only one year and then moves out, I’m essentially breaking even—but I’m still left with another vacancy to fill. Could offering below-market rent have kept them longer? Is a rent increase the only reason for them vacating? Possibly, and in that specific case, his strategy might make sense. But that’s just one scenario out of many.
The key difference is that I understand the type of tenants these properties attract. From the very beginning, we set clear expectations and include language in our leases that outlines a 3% annual rent increase. So when it’s time to renew, there are no surprises.
And consider tenant longevity. Our average tenant stays five or more years.
If rented at $1,450 for five years with no increases:
$87,000 total gross rent
If rented at $1,695 with 3% yearly increases:
Year 1: $1,695 = $20,340
Year 2: $1,746 = $20,952
Year 3: $1,798 = $21,576
Year 4: $1,852 = $22,224
Year 5: $1,907 = $22,884
Total: $107,976—nearly 20% more gross income over five years.
The key takeaway? The decision isn’t about automatically lowering rent to avoid vacancy. It’s about knowing your tenant pool and pricing your properties strategically.
One final point: keeping rents artificially low can also impact your property’s future refinancing. Below-market rents can reduce the amount you can pull out in a cash-out refinance. The could be the difference between taking cash or bringing cash to closing.
Patience and strategic pricing often outweigh the short-term “safety” of a slightly lower rent.