Q: We have a very nice rental house that we’ve had for a few years now.

We’ve always been able to get $1,500 a month for it. Our last tenant moved out in September and we haven’t had a renter since. We pay a mortgage on it and are losing both the rent we are used to getting and are now paying the full mortgage payment. We’ve had many people look at it but when we call them back they all say they’ve found something cheaper. Some have even tried to bargain us down on the rent. We really don’t want to have to lower the rent. Any suggestions?

A: Lower the rent. Rentals are not bringing in what they were a couple of years ago for the same reason that housing prices dropped. We are in a recession and all of us have taken a hit in the pocketbook as a result.

The critical thing is to get a good tenant in the house and get some cash flow. I know it seems like fifth grade math but let’s do the numbers. Let’s just say that you are paying out $1,800 per month on the mortgage, insurance and taxes. If you had rented it in October for $1,200 a month you would have had a negative cash flow of $3,600 up to the end of March after paying your mortgage payment. As it is, you’ve experienced a $10,800 short fall in that timeframe! Think about it.

You should also know that some insurance carriers will cancel your policy if they know the house has been left unoccupied. In addition, leaving a house empty can set you up for break-ins even in our relatively law abiding community.

I know it’s hard to lower the rent after having it higher for a long time but it’s better to have a good tenant in there taking care of things and paying you a reasonable rent, than having it sit empty, draining your bank account. Best of luck.