Apartment Pricing in a Downturn

[Ryan Daigle]

I thought this was a decent article about lessons learned during 2008/09 regarding pricing of apartment rents. The gist being that pricing is only one tool in the toolbox with the end goal being revenue preservation and optimization. Candidate screening, lease terms, net leases, etc... all need to be looked at when managing revenues.

Understand how your competitors price renewals. Pay less attention to rent comps from call-arounds and web listings. These cover only new leases and rarely reflect what’s on the rent roll. One of the worst mistakes you can make is to follow your competitors off the ledge of the cliff when your internal data and your transactional benchmarks tell you there’s no need to do so.

Don’t panic, adjust your pricing strategy based on the market data and nature of your rent roll. Look for ways to prevent turnover such as sending renewal offers out earlier and getting renters in for longer lease terms. If you work to increase renewals, it can offset the decrease in new lease demand.