All apartments are the same right? Each apartment is just a box, four walls with a kitchen and a bathroom, right? From building to building, unit to unit this is the common misconception, but it is WRONG! Each apartment is different, it has its own unique space and deserves its own unique renter to make it home. Even within the same building each unit is going to vary from the next and have its own personality. Maybe this unit is on the first floor, and that unit faces east, maybe another unit just got new carpets or paint, and another unit has different cupboards or an updated oven and range unit. Each of these traits makes a unit different, makes it not just like every other unit in the building. The sizes and layouts may be similar, each unit may have similar elements but they are not the same.
It is up to the manager or leasing agent of the property to be aware of each unit’s strengths. Maybe it is east facing and gets a great view of the sunrise, or is on the third floor and has less neighbor noise, or has updated appliances in stainless steel, or new carpets. Each of these things offers something different and appeals to different people allowing a manager/leasing agent to sell their units individually.
But, if each unit is unique why do they all cost the same? A property can maximize their income by individually pricing each unit based on its unique features. The unit with new carpets may cost more than the unit with a parking lot view, and less than the unit on the third floor. Consider which of your units are requested the most and price them higher. Do people want to be on the top floors or on the lower ones, do you have units that have views worth selling, or sound proofing that tenants have asked about. Each of these things can change the rent you charge for each unit.
This doesn’t mean that each price is drastically different by $100 or so, but the difference of $10, $15, or $20 can add up over the terms of a 12 month lease. Just an extra $10 for new carpet is an extra $120 in a year, and an extra $25 for a great view is $300 more. Start with your base price. If you two bedroom units are $675 start there and consider each unit to see if you can raise that rent just a little bit.
And never fear if tenants ask about the differences (She’s paying $25 dollars less for the same unit I have) because you can explain the features that cause the price difference (She doesn’t have the updated stainless appliances in her unit, you have an extra perk so it costs a bit more). You may not please everyone but than you weren’t going to do that anyway, and over all you will increase your bottom line.
Pricing each unit based on its own merits and features allows you to keep your pricing dynamic and bringing in as much rent as you can. Not all units are the same so don’t treat them as such. Evaluate each unit and determine if it is worth a little extra, or if a new coat of paint is worth a little more.
What sort of pricing do you have at your complex? Does it change with each new tenant or is it static?
Also see our other Tips for Managers for articles about managing rental property!