Lower the Rent or Wait? What an Empty Room Costs, Day by Day

What one empty day costs

Take the room's rent for a year and divide by 365. A $650 room brings in $7,800 a year, so every day it stands empty is $21.37 you do not get back. A week is $149.59.

That one figure weighs everything else in this guide, so work it out for each room and write it down. It turns "the room has been empty a while" into a bill. Three weeks empty is $448.77.

It also tells you what the room really earns. If this room stands empty for three weeks once a year, the $650 on the listing is really $612.60 a month. Nobody sends you a statement for the difference, which is why it is easy to ignore.

• The year's rent divided by 365 is one empty day
• Empty days times that figure is what the wait cost
• The year less the empty days, divided by twelve, is what the room really earns

What a lower rent costs

A lower rent feels small because you say it by the month. $50 off does not sound like much. But whoever signs at the lower rent pays it every month of the lease, so $50 off a 12-month lease is $600.

Now put the two numbers side by side. $600 divided by $21.37 a day is 29 days, rounded up. The lower rent is worth it only if it fills the room at least 29 days sooner than the full rent would have.

That is a high bar. If this room usually fills in three weeks, there are not 29 days to save. Even if the lower price filled it on the first day, you would end up $151.23 behind where waiting left you.

And it does not end with the lease. Next year's renewal starts from the lower figure, so a cut made in one slow month follows the room for as long as that resident stays.

• The cut times the months of the lease is what it costs
• That cost divided by one empty day is the days it has to save
• A renewal starts from the rent on the lease, cut included

• Free vacancy cost calculator: type your own rent, empty days and cut

The bar moves with the cut and the lease

On the same $650 room, over 12 months: $25 off costs $300 and has to save 15 days. $50 off costs $600 and has to save 29. $100 off costs $1,200 and has to save 57, which is close to two months.

A shorter lease lowers the bar. $50 off a 6-month lease costs $300 and pays for itself in 15 days. If you rent to interns, travel nurses or students by the semester, a small cut is easier to justify than it is on a year lease.

Turn the sum round and you get the most useful figure of all: the cut that costs the same as the wait. For a room that takes three weeks to fill on a year lease, that is $37 a month. Anything bigger costs more than the empty days it is meant to save.

• A bigger cut has to save more days, in step
• A shorter lease makes the same cut cheaper
• The wait's cost divided by the lease months is the largest cut worth making

When waiting is the wrong answer

None of this says never lower the rent. It says the test is the empty days still ahead of you, and you have to judge those honestly. A room that has stood empty six weeks at this price has already cost $897.54, more than the $50 cut costs over the whole lease, and the market has told you something.

So read what the listing is doing, not only the calendar. Count four things for the last two weeks: how many people saw the listing, how many wrote to you, how many came to see the room, and how many applied.

Plenty of views and no messages points at the price or the photos. Messages and no showings is usually you: answer the same day and offer a time in the first reply. Showings and no applications is the room or the house, and no rent you would accept fixes a bedroom that smells of smoke or a kitchen nobody cleans. Hardly any views at all is the listing itself: the wrong site, a weak title, or it has slid down the page and needs posting again.

Lower the rent when the count points at the price and nothing else. People look, compare and go quiet, and rooms like yours near you are listed for less. Then cut once, by enough to matter, and not in $10 steps every week. A listing whose price keeps dropping teaches people to wait.

• Views but no messages: the price or the photos
• Messages but no showings: how fast you answer
• Showings but no applications: the room or the house
• No views: the listing, before anything else

Try a one-time special before a lower rent

If you want the room filled this week, there is a cheaper way to offer a deal than changing the rent. Take $200 off the first month. It costs $200 once. At $21.37 a day it pays for itself if it fills the room 10 days sooner, and the rent on the lease stays $650.

Set that beside the $50 cut: $200 once against $600 over the lease. And next year's renewal starts from the full rent, not a reduced one.

Write it on the lease as what it is: a discount on the first month, with the rent stated in full. Your books then show the room's real rent with a one-time discount beside it, and nobody has to remember in month seven why this room pays less.

Offer it on the room, never to a person. Put it in the listing with an end date and give it to whoever qualifies first. A deal you offer one applicant and not the next is how a fair housing complaint starts.

• A special costs once; a lower rent costs every month
• The lease still states the full rent
• Same room, same offer, for every applicant

In a house rented by the room, everyone hears the price

In a whole-house rental a lower rent is between you and one tenant. In a house rented by the bedroom, the people in the other rooms know what the new person pays within a month. Let one bedroom go for $50 less than the same-sized room next door and expect the person next door to ask for the same at renewal.

So a cut on one room is rarely a cut on one room. Count it again for every similar room in the house before you decide, because that is what it may cost you by this time next year.

A one-time special survives the kitchen conversation better. "I got $200 off my first month because the room was empty" is a fact about a slow week. "I pay $50 less than you" is a grievance.

• Housemates compare rents within a month
• A cut on one room becomes a request from the others
• A first-month special does not change what the room costs

• How to split rent by room size, so the price list holds up when residents compare
• Roommate turnover: refill one bedroom without losing a month of rent

Keep the number in front of you

Landlords cut rent too early for a plain reason: the empty days are invisible and the asking rent is right there on the listing. Fix that first. Whatever you run the house with, keep each room's daily figure and its empty days this year somewhere you will see them.

RentCaddie is built around the room. Each bedroom has its own asking rent, its own lease and its own balance. The ledger adds up what your empty rooms cost over any period you pick, and a discount on the first month goes on the lease as a discount, so the room's rent stays what it is. The calculator above is free and needs no account. Run your own room through it before you change a price.

• How RentCaddie runs a rent-by-the-room house