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The Evolution of Apartment Pricing

Evolution Apartment Pricing

Once upon a time, apartment rents were based on supply and demand. While that’s still true to some extent, today’s pricing algorithms are much more intelligent than reactive, and it’s an industry trend that’s protecting investors’ bottom line more than ever.

The Guessing Game Goes High-Tech

The old pricing model might have taken into account local occupancy rates and comparable rents from other properties, and that provides some market responsiveness. What it doesn’t do is take into account value-added amenities and a single multifamily property’s level of risk from delayed lease renewals that end up on a month-to-month program and could vacate at any moment.

Enter: predictive analysis rental property pricing. It’s a more scientific approach to customizing your property’s unit pricing based on history, your local market, your community amenities, and the risk-and-reward balance that all those factors provide. Predictive analytics adjusts rent up or down primarily depending on risk, and it’s not a brave new idea. Mortgage agents and auto financiers have used credit scores as predictors of risk for years, but this is a game-changer for setting property rent rates.

How to Build an Ideal Pricing Model

There are turnkey software packages—such as RentPush—that can automatically suggest rents based on your input. With just a few keystrokes and uploading some property history, this type of software can take care of pricing strategy so property managers can focus on marketing a property that’s priced to protect the bottom line and takes risk into account.

Before you begin shopping for a data mining software, it’s a good idea to learn more about predictive analytics so you’re a better-prepared consumer. Or, leave it to the experts to find the pricing model that best suits your property, location, and target tenants. Class A Management has experts who want to help you develop a strategy and grow your investment portfolio. Call us today at 817-284-1411 or e-mail