What about pricing?! How your rent prices can cause more vacancy

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Are you looking for ways to make your apartment community more efficient and effective? This is final article of our Apartment Vacancy Analysis series, which will help you find and fix the gaps across the marketing and leasing chain, and offers practical strategies and tools to help take your apartment community to the next level! Access the full table of contents available below.

Throughout this series, we've pinpointed how to conduct a vacancy analysis across every critical point in your marketing and leasing chain— a.k.a the typical apartment resident's lifecycle—to help pinpoint any weaknesses in your property management's operation.

Now, you're probably wondering by this point, "What about my pricing?"

That's why we've purposefully saved this section for last.

If pricing is too low...

If your rent prices are too low, it masks any other issue in your operation because you'll have no problems attracting prospective residents and keeping occupancy rates high. Renters will want to rent from your community because your rents are much cheaper than other properties.

Lowering rent prices minimizes your revenue capacity and can leave you operating blindly, not addressing any lingering issues that could hurt you in the future since you do not see many vacancies occur presently.

If pricing is too high...

If your pricing is too expensive, any efforts to establish excellence across your operational chain are meaningless. 

You'll never be able to control vacancies if current and future renters always have the option to lease from similar, more affordable communities in your local marketplace.

How to know if your rent prices are the cause of your vacancy problem

Assuming that everything to this point in your marketing and leasing chain is in good order, then there are two simple things you can check to determine if your vacancy is a result of poorly set rent prices.

Website Visit-to-Lead Conversion Rate

If it takes tons of website visitors to get one lead from your website, pricing could be a factor. 

First, check and make sure that you're following best practices for how you're displaying pricing on your community website. As stated before, showing one price is the easiest way for a prospect to determine affordability.

From there, the next thing to consider is that your pricing is too expensive, causing visitors to look elsewhere. Setting prices is really complicated (whether you're using software or doing it on your own), so don't feel like it's a problem to decrease pricing or run a special when it's warranted.

Average Ready Days to Rent Each Unit

You can also conclude pricing is too expensive if the Average Ready Days to rent each unit is high in addition to your website visit-to-lead conversion rate.  

If both of the above metrics seem 'off,' pricing is part of the blame, and addressing your pricing strategy will help you benefit from the efforts you've placed to excel in the other vital areas of your operational chain.

The key is flexibility; letting pricing 'stand pat' and unaddressed for a month or so at a time could easily cause your rents to be higher than necessary. 

Complete Apartment Vacancy Analysis Series
Introduction: What's causing your apartment's vacancy? Here's how to find & fix it
Part 2: Is your apartment's renewals strategy causing more vacancy?
Part 3: Are your residents satisfied with their experience at your apartments?
Part 4: Are you accruing excess vacancy loss after units lease?
Part 5: Are you properly vetting your apartment's lease applications?
Part 6: Is your apartment's application process to blame for vacancies?
Part 7: Are your apartment tours helping overcome vacancy?
Part 8: Do you have enough 'good' leads to improve apartment leasing?
Part 9: Is your apartment website converting leads to leases?
Part 10: How qualified is the traffic to your apartment website?
Part 11: What about pricing?! How rents affect your apartment's performance

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RentVision enables you to generate more qualified traffic when you have a sudden increase in vacancy, and saves you marketing dollars when it’s under control.