BIGGER UNITS AREN’T ALWAYS BETTER. MORE BEDROOMS AREN’T ALWAYS BETTER.
Bigger units aren’t always better. More bedrooms aren’t always better. While a 3-bedroom unit will nearly always command a higher rent than a 1-bedroom efficiency, if your property is in a market where the bulk of your prospective tenants are young, single and blue-collar, that higher rent 3-bedroom unit might sit for weeks or months longer than the efficiency apartment. KNOW YOUR ABSORPTION RATES
Absorption rates are a way to measure the demand for a particular type of unit based on the number of those units on the market and the rate at which they are leased. Higher absorption rates indicate higher demand for those types of units, which translates to a lower vacancy rate and higher income for the property.
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Higher Absorption Rates
Higher Demand
Lower Vacancy Rate
Higher Income
Part of being a great property or asset manager is to understand who your prospective tenant is and what types of units – in terms of size, rooms and amenities – they will want, and then provide those types of units in order to minimize vacancy and maximize revenue.
When considering major renovations to units during a turnover, make sure you are familiar with the type of renovations necessary to ensure that your unit has strong demand from the market and can maximize rental income while minimizing lease-up time.
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