Keep Accelerating Your Rents with Revenue Management
Over the past 18 to 24 months, the nation’s apartment operators have been very focused on getting rents back to the prior highs established in late 2007 and early 2008. In more and more markets, we’re actually getting there. But what happens then?
MPF Research stats suggest that there’s some tendency to take your foot off the gas, once that milestone is reached. In select markets where rents now are back in line with, or slightly above the levels seen three years ago, the rent growth pace has slowed a bit of late, despite occupancy that is still rising or has stabilized at essentially full levels. Examples of this pattern are seen in the DC/Baltimore area, New York, South Florida, Raleigh, and Nashville.
“As long as occupancy rates look good and turnover when existing leases expire isn’t really spiking, previous highs certainly don’t reflect a property’s rent ceiling,” according to Greg Willett, vice president, research and analysis of MPF Research. “Furthermore, we’re not at a point where the share of income spent on rent is moving outside the bounds of the historical norm, so the inability to afford higher rents shouldn’t yet be an insurmountable challenge for many households.”
Revenue management can help ensure that you’re still pushing the envelope, even as prerecession rent levels are achieved.
“Our in place rents are finally in line with pre recession levels and we keep pushing north,” said Marc Carter, principal at Nashville-based Carter-Haston. “YieldStar emboldens us to a degree we would never accomplish on our own. Unprecedented opportunities are here today. YieldStar ensures we aren’t imposing artificial limits, based on past rent levels achieved.”
How aggressive are you being with rents at your properties? How can revenue management drive better results for you?