Nancy Simmons Starrs is founder and president of Apartment Detectives, a D.C., Maryland and Northern Virginia apartment search service.
Many properties in the area and all over the United States have started to use software tools to determine rents on apartments as well as to renew leases.
It’s a bit baffling if you have searched for an apartment recently. A price quoted for an apartment can vary depending on the lease start date you choose, even if that is a one- or two-day difference, and the lease term you choose. If you choose a lease start date two weeks later than the date an apartment becomes available, this can cause a more significant increase in the price quoted at this time of year.
Many of my clients feel like this is a game of rental roulette, so I thought I would explain a bit about how these revenue-management software systems work.
Quite similar to technology used for hotels and airline tickets, the system takes into account a number of factors to create a price quote. The software compares competitors’ rental rates, current market conditions, seasonal trends, leasing velocity, lease term, vacancy rates, time of year and many other factors on a daily basis to determine a rental rate.
In the busier times of year for renting apartments, these prices can change daily. This system works the same way for lease renewals.
These systems seem to have no rhyme or reason on the surface. Rents tend to be on the rise from this time of year through August.
Since the system takes into account seasonal trends, you can use that to your advantage — if you can control when you need to move or renew a lease.
Plan your move for a slower time of year like fall or winter. If you must move at this time of year, often times there is no planning with a relocation for a new job or life change, there are some factors that can help for a better rent. Being flexible on your lease term, shorter or longer than one year can help. These systems will determine the marketability of the apartment at the end of your lease term, so try a few lease terms to find the best price.
The vacancy rate of a property as a factor can also help at this time of year, so find a property that has a higher vacancy rate, and this will help to give you better rent options. You might have to consider being flexible on location to do this, but this will help provide more options with better rents. There are also properties that are not on this system.
I hope this has taken some of the mystery out a system that on the surface seemingly provides random prices.
I hope this also helps you understand why a leasing office cannot tell you what a rent on an apartment will be tomorrow or next week. They don’t know the answer until they input the data, and the computer gives them the rent amount.