Endless factors come together with different strategies down to each ownership, management, manager, weaknesses in the property like insufficient parking or a compromised floor plan that won’t lease at mkt rate, or broader market issues like weak/strong school districts or job growth, or seasonal factors like university schedule. Societal preference like roommates/no roommates (either marriage or simply splitting the rent bill) can heavily impact demand.
For overall market, i.e. happy compromise between landlord and renter, 93 is close to optimal. Landlords really don’t want to go below 90 and typically will start to drop rents to maintain occupancy. If the market pushes past 96, developers can deliver new units pretty quickly. Forecasting- no one can predict the future but everyone thinks they can, so lots of crazy ideas there. There’s also a function of what are people willing/expecting to pay. So if people generally are unwilling to pay above $1700/mo, maybe Landlord just stuffs the property to 99% at the local maximum rent. We have found that to be a working strategy, rather than squeezing every last nickel out of renters, just find the comfortable breakpoint and fill up the building.
There’s all these technical details, but then behind each signed lease is a person making a complex personal and emotional decision that changes their lives for the next 12 months minimum.
For overall market, i.e. happy compromise between landlord and renter, 93 is close to optimal. Landlords really don’t want to go below 90 and typically will start to drop rents to maintain occupancy. If the market pushes past 96, developers can deliver new units pretty quickly. Forecasting- no one can predict the future but everyone thinks they can, so lots of crazy ideas there. There’s also a function of what are people willing/expecting to pay. So if people generally are unwilling to pay above $1700/mo, maybe Landlord just stuffs the property to 99% at the local maximum rent. We have found that to be a working strategy, rather than squeezing every last nickel out of renters, just find the comfortable breakpoint and fill up the building.
There’s all these technical details, but then behind each signed lease is a person making a complex personal and emotional decision that changes their lives for the next 12 months minimum.
Fun!