At Vintage Real Estate Services (VRE), we’ve been closely monitoring the Tampa Bay real estate market, where the lingering effects of the COVID-19 boom are still evident. During the pandemic, Tampa was one of the hottest real estate markets in the country, with property values surging and buyers paying inflated prices. Many of those same property owners are trying to recoup their investments but setting unrealistic sales and rental prices. This leads to properties sitting on the market for extended periods, ultimately costing them more money. Alex Cuoto from Vintage Real Estate in Tampa, FL states:
“We’ve seen this scenario play out repeatedly recently with potential new clients: They initially try to sell their property, but after it sits unsold, they come to us hoping to rent it out—without adjusting their expectations on what they can realistically charge for rent.”
As an experienced property management and real estate firm, we understand the challenges of managing these inflated expectations in a post-pandemic market. This is not just a Tampa problem—many markets nationwide deal with similar issues. Here’s how property managers can guide clients who bought during the boom but are now struggling to price their properties realistically, whether for sale or rent.
Educate Your Clients with Data
Clients often rely on their perception of the market or the initial investment they made (especially if they are rookie investors), which leads to unrealistic expectations. Use local market data and comparable listings to demonstrate the real-time conditions of both the sales and rental markets.
Sales: Show price reductions on comparable properties, average days on the market, and buyer interest levels.
Rentals: Highlight how overpricing leads to higher vacancy rates and long-term financial losses compared to competitive pricing.
Offering transparent, data-driven insights helps clients understand the importance of adjusting their expectations to meet market conditions.
Present the Reality of Losses
Many property owners who overpaid during the market boom are now trying to avoid financial loss by setting their sales or rental prices too high. As property managers, it's crucial to give these clients some "tough love" and show them the harsh reality: holding out for an unrealistic price can end up costing them more in the long run. In some cases, taking a moderate loss now can prevent much deeper losses from extended vacancies, property depreciation, or ongoing maintenance costs.
For example, let’s say a property owner insists on renting their single-family home for $2,500 per month because their mortgage is $2,300. However, the local market comps show that similar properties only rent for $2,000. At that inflated price, the property could sit vacant for months. If it remains vacant for just three months, that’s a $6,000 loss in potential rental income—far exceeding the $300 per month they would lose by renting at market rate.
Rental Strategy: Use clear math to show clients that accepting market-rate rent prevents prolonged vacancies and secures a steady cash flow that mitigates losses. By renting the property for $2,000/month now, they will have consistent income rather than letting it sit empty while waiting for a tenant who is willing to pay above-market rates.
Sales Strategy: Similarly, with sales, explain how letting a property linger on the market leads to more significant depreciation and lower offers over time. Buyers may assume something is wrong with the home if it remains unsold for an extended period, forcing the seller to reduce the price anyway—likely more than if they had priced it correctly from the start.
Offer Creative Solutions to Maximize Cash Flow
For clients open to renting, emphasize the importance of pricing rentals competitively to minimize vacancy. There are additional strategies to maximize their return without scaring off tenants:
Flexible Lease Terms: Offering shorter-term leases can attract renters who are looking for temporary housing solutions. This ensures that the property is generating income while still keeping long-term options open.
Incentives: Offering amenities, discounted rent for longer lease terms, or free services (e.g., lawn care) can make a rental property more appealing, even if the asking price is slightly higher than the market average.
Leverage Technology for Maximum Exposure
Harness the power of digital tools to expand the reach of listings for both sales and rentals.
Dynamic Pricing Tools: Property managers can utilize rental pricing tools that automatically adjust rent prices based on current market trends, ensuring the property remains competitive in real time.
Advanced Marketing: Consider using targeted ads and virtual tours to showcase properties. Highlight the unique aspects of the home to justify the price (if reasonable), while ensuring that you're reaching the right audience who can afford the rent or purchase price.
Manage Expectations Early and Proactively
Managing client expectations from the start will prevent future frustrations. Be upfront with property owners about the current market trends and realistic timelines for both selling and renting. This is especially important for those who purchased homes at inflated prices during the COVID real estate boom.
Setting Realistic Timelines: Explain how long similar properties have stayed on the market and provide projections based on different pricing strategies.
Proactive Adjustments: If a property isn't moving within a reasonable timeframe, don’t wait. Recommend timely price reductions or adjusted marketing strategies before the property sits for too long.
Diversify Marketing Efforts
Broaden the approach beyond traditional real estate platforms. Consider advertising through alternative channels, such as social media, targeted PPC campaigns, or local community platforms like Nextdoor to attract tenants or buyers activelylooking for properties in that area.
Collaborate with a Network of Experts
When dealing with owners who are overpricing properties, it can be beneficial to bring in external voices like real estate agents, contractors, or appraisers who can offer additional perspectives and expert advice.
Agents: Collaborate with a real estate agent who can provide insight into the sales market and offer a second opinion on price adjustments.
Appraisers: Bring an appraiser for an unbiased property valuation to help set more realistic expectations.
Positioning Your Firm as the Voice of Reason
The current market poses a unique challenge for property managers as they balance client expectations with real-world market conditions. Property managers can help clients make informed decisions and maximize their returns in a competitive environment by focusing on education, transparency, and proactive strategies.
Navigating this tricky landscape requires tact and expertise, but by positioning yourself as the expert, you can guide clients toward success, even in the face of inevitable market corrections.
David Sigler is a Florida native who grew up in Fort Lauderdale Florida. He attended the University of Central Florida where he received his bachelor’s degree in Business Administration. David has since become a licensed General Contractor & Real Estate Broker. He has been active in Florida real estate and construction for over 15 years. During the Great Recession he was forced to refocus his ambitions and landed on property management. Starting with a handful of homes that could not be sold, he grew his portfolio and eventually bought the brokerage. With his experience, knowledge, and resources, his company prides themselves on successful turn-key residential investment solutions. He now manages hundreds of homes covering 5 counties and his construction company provides maintenance services to his management company as well as other local managers. David is an active member of the National Association Residential Property Managers and has served on the Florida State Board for over 6 years in many different roles; most recently as the NARPM Florida Chapter President (2019). Active in the GTR community, he has served on the property management subcommittee for over 4 years and recently as chair of the group. He is also active in local and state legislation that affects the property management industry. His unique understanding and perspective of property management and its associated maintenance has provided him with numerous public speaking opportunities. Outside of work, not only is he an avid outdoors man and a board member for several local Non-Profit organizations, but first and foremost a Father and Husband.