Why do Apartment Rent Rates Fluctuate?admin
OMG! Why did the rent rate increase in just one day? Or why is the rent rate different than the price on my list? Or I saw this same apartment on another website and this floor plan was listed at $XXXX price, why the difference? I am asked so often questions like this I decided to write a blog post to help explain WHY. It can be frustrating when the affordable apartment you liked yesterday may not be so affordable today. You may be asking ‘how can the prices keep changing?’ There are many factors that affect apartment rent rates; here are some of the biggest to keep in mind while you hunt for an apartment.
SAME FLOOR PLAN DOES NOT ALWAYS = SAME PRICE Almost all apartments have a starting price on each floor plan offered. Many times the price they advertise is the starting price. You find a 2 bed 2 bath that is advertised as $1400 and you go in to tour and the cheapest 2 bed 2 bath is $1600. Say what? Apartments charge different rates by floor-plan but they also can charge different rates based on other factors such as the floor the unit available is on, for example a 1st floor unit may be a higher rate than a 3rd floor unit. Also, if certain units in a community have upgrades then those units will typically lease higher than a basic unit. Or if a particular unit has an amazing view the price will likely be higher. This especially true if you are looking at high-rise apartments. SUPPLY & DEMAND Apartment rates can fluctuate daily (even more often) and the change is due to supply and demand. As an apartment reaches high occupancy rates the rent rates tend to rise and they are not pressed to offer specials. When an apartment has low occupancy rates, meaning they have lots of vacant units or units on notice to vacate the price may drop and they may run some specials to get those units leased faster. The rate can fluctuate either way.
DYNAMIC PRICING SOFWARE What is Dynamic Pricing Software? It’s basically an algorithm that determines the optimal price for a specific date and time. Remember the last time you shopped online for an airline ticket? You may have looked at prices one evening to get an idea of the costs and then you go back to purchase your ticket a day or few later and you noticed the price has changed. As the seats on the plane are purchased the rates change. As the flight reaches max occupancy the rates on the existing seats will tend to rise. Airlines have been using this technology for many years. Many apartments are now using this software. As units lease or notices to vacate are turned in – the info is entered into this software program. This is how prices can change same day!