The answer to this simple question is anything but simple.
As with any measurement, the answer is always two words: It Depends.
It depends on how you measure rental rates and what data points you are using. Below are some of the ways we track this information on the portfolios we manage:
- Rent per square foot
- New Move-In rental rates
- Renewal rental rates
- Year-over-year blended rent inflation: This is a method of tracking rent rate growth based on rent growth for new move-ins and renewals. It ‘blends’ the first two rates since both rates operate off materially different consumer behavioral patterns.
- Stabilized Occupancy: While this is not exactly a measure of rental rate direction, it is a worthwhile tracking mechanism to observe how a portfolio is performing. This is the occupancy level reached by a new property added to our portfolio after the initial lease-up period. If the property is correctly marketed, managed, and maintained, in theory it should be stable to use for future statistical analysis. (Side note: Stabilized occupancies in excess of 95% are NOT good….that means a failure to charge enough rent has occurred.)
As always, if you have questions about your properties, call or click to reach me.
Dan Baldini is the Founder of Polaris Real Estate & Polaris Property Management, LLC and has been an Adjunct Professor in the College of Business Finance Department at Butler University in Indianapolis where he taught Real Estate Investing.
Dan focuses his practice on the residential real estate markets including Indianapolis, Carmel, Zionsville, Fishers and other surrounding areas. Dan continually seeks out new resources for Team training and education in order to keep all the Team members skills on the leading edge of real estate best practices. He is an active real estate investor himself, owning and managing a portfolio of investment properties in the Indianapolis markets.
A resident of the Northside area since 1979, Dan has extensive intimate knowledge and experience of the market forces that dominate the Zionsville, Carmel, Fishers, and Indianapolis real estate markets. He has been active in real estate since 1996 with a specific focus on North side properties. Dan is an active networker in his local communities as well as with top agents nationwide