Renters Will Pay for Better Management!!

WHAT DO RENTERS REALLY WANT … AND WILL THEY PAY FOR IT?

Earlier this year the research giant J.D. Power & Associates undertook an opinion survey in four different US cities to find out which factors were considered most important by renters in choosing where to live. They asked respondents to rate five factors in order of importance: amenities; condition of unit at move-in; rent/value; safety/security; sense of community, and service staff. The results, released in September, showed that the factor ranking highest was a sense of community in the apartment complex. The pollsters also asked people to mention an apartment owner or manager they thought did a good job of providing the factors they looked for. That’s the part that interested us, because it gave us a chance to use the RealFacts database to see if residents would pay extra rent for good management:

We compared the average rent for all two-bedroom/two-bath units in each MSA with the average rent for those units at apartment communities in the portfolio of the companies that were highest ranked for their management by respondents in the Power survey. Here are the results.


Las Vegas: Camden, $994 vs $957 for the MSA
Denver: Legacy Partners, $1,087 vs $1,029 for the MSA
Orlando: ZOM, $1,101 vs $991 for the MSA
San Jose: Irvine Company, $2,328 vs $1,881 for the MSA.


So we see that good management can indeed rewards the managers. The differential in rents between the best managers and the MSA average ranges from a minimum of about $40 a month in Las Vegas, $60 a month in Denver, to more than $100 a month in Orlando to an astounding $450 per month in San Jose. When you multiply the increased rent per unit times an average unit size of 200 to 300 units, and then multiply that figure by 12 months in a year, the additional income could easily add up to more than a million dollars a year --- a powerful incentive to be a good manager of rental property.

Caroline S. Latham
CEO
RealFacts