The Rental Price Illusion: When Expectations Collide with Reality
In the past week, I’ve had the same conversation six times with Business Development Managers we coach at PM PathBuilders. It’s a recurring issue in our industry, one that I believe stems from the inflated home prices of 2020 and 2021. While property values skyrocketed, rental rates and appreciation haven’t kept pace, creating a disconnect between the sales market and rental expectations. As a result, we’re seeing a rise in accidental landlords—people who never planned to rent out their homes—coming into the market with unrealistic expectations.
These owners often believe they can rent their properties for much higher prices than the market will support. When this happens, we typically see one of two outcomes:
The property manager takes a realistic, honest approach, educating the owner about current market conditions and setting the right expectations for rental pricing.
The alternative is a low-integrity conversation, where the owner is promised an inflated rental price that simply isn’t feasible, and the property management company is left crossing their fingers in hopes they can deliver.
After working with over 200 property management companies, one thing is clear: No one has a magic formula for renting overpriced properties faster than anyone else. If a property isn’t renting, it almost always comes down to one of three factors: location, condition, or price. We can’t change the location, and most owners aren’t eager to spend $30,000 to $50,000 on renovations just to increase their monthly rent by $250 to $300.
So, the most effective lever we can pull is pricing the property correctly.
In those low-integrity conversations, owners are often promised an inflated price that the property management company knows is unrealistic. This creates an over-promise, under-deliver scenario, where frustration builds on all sides, and the property management company is left crossing their fingers, hoping they can somehow meet those expectations.
The way we communicate during these conversations is key to our success. It’s a delicate moment, and the confidence we exude here is critical. We can’t simply tell owners what they want to hear. If we inflate the rental price, we’re setting everyone up for failure. Not only are we giving owners false hope, but we’re also putting unnecessary pressure on our leasing team, which now has to work with unrealistic expectations and timelines.
I hesitate to call this an "objection" because, while there’s certainly a sales element at play, this is really more of a roadblock—one we simply can’t sell our way through. It’s vital to grasp that distinction. We cannot outmaneuver an owner’s financial reality. Pushing beyond it isn’t just unethical; it’s a recipe for disaster. From negative reviews to broken relationships—or worse, lawsuits—nothing good comes from setting false expectations. Onboarding an owner who’s financially stretched too thin is setting up both sides for constant friction. Every maintenance request, every service call, becomes a point of pain.
This is why screening upfront for financial stamina is absolutely critical. It’s about protecting both the owner and your team from unnecessary stress and setting the relationship on the right path from day one.
The solution is straightforward: have honest conversations, set realistic expectations, and avoid the chaos of misaligned goals.
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