The rental sector has been soaring as of late, with occupancy rates hitting record highs as would-be homeowners have been priced out of the for-sale market. As of December, 97.5 percent of professionally managed apartment units were occupied, according to data from property management software company RealPage, a new high for the metric.
That fact may be lulling landlords and property managers into a feeling of safety, thinking that they can rest on their laurels a bit while enjoying the benefits of the current rental landscape.
But nothing lasts forever, and property managers would do well to avoid the pitfalls of the “occupancy fallacy,” or the notion that current high occupancy rates will alleviate long-term vacancy issues, the Redfin-owned rental industry marketing company RentPath advises.
Amid record levels of demand, renters are continuing to keep a watchful eye on the market and being prepared to move when a good opportunity arises.
“Renter migration is the sleeping giant that apartment communities won’t want to ignore,” RentPath warns. As of a November 2021 survey conducted by the rental marketing company, 60 percent of renters reported that they planned to move to a new apartment or home within the next six months.
With the ability to work from anywhere more common all the time — 70 percent of renters reported to the National Multifamily Housing Council they’ll continue to work remotely as often they currently do, or more, in the future — renters have more flexibility in where they live, and therefore, more control when it comes to hunting for the best housing bargain.
A November report from RentPath showed that renters are prioritizing affordability, neighborhood safety and proximity to family when it comes to looking for a new place to live. Although landlords and property managers can’t control some of those factors, they should remain aware of how their rent stacks up in terms of affordability compared with their neighboring competitors, in order to stay competitive.
As of November, the Federal Reserve anticipated the median increase in the price of rent to be 10.1 percent in the next year, which will force many renters to continue to search for more affordable options, especially now that the expired federal eviction moratorium is no longer a fallback option.
Furthermore, individuals and families who opted to rent short-term while waiting for the for-sale market to cool down may be finding that they need to rent even longer at a more affordable rate, as the for-sale market remains pricey and competitive. Those groups, therefore, are likely on the hunt for a more viable long-term rental option now.
Losing a renter can cost property managers and landlords between $1,000 to $5,000 per resident, according to the National Apartment Association, depending on the extent of needed unit renovations. Therefore, RentPath recommends, landlords should implement marketing and reputation management strategies that both target prospective residents and nurture current residents.
Optimizing marketing across social media, search advertising, email marketing and internet listing services (ILSs) can help property managers gain more leads from all corners of the country.
Offering virtual tour options, ample photos and floor plans, and offering online rental application options will also help cater to renters looking to take advantage of the ability to work remotely by relocating.
In short, property managers need to stay on top of their game as renters continue to lead flexible lifestyles, even if this sector of the market is currently flourishing.
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Email Lillian Dickerson