Curious to see what factors people look for when conducting market studies in multifamily. Also wondering:
How do you identify rents when most properties these days use revenue optimizers? I have seen larger floor plans advertised cheaper than smaller floorplans. Or I've seen 13 month leases a couple hundred dollars cheaper than 12 month options. It's hard to get a true rent to comp to this way.
Do you account for seasonality? How so?
Do you comp floorplan to floorplan (in subject property), or average all 1 bedrooms, 2 bedrooms, etc?
Do you incorporate any artificial discount to comp property rents if the units have special features like a washer/dryer in the unit, whereas the subject property does not?
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Use ALN - Apartment Listing Network.
It is a private subscription service but has nationwide multifamily comps that will help you gauge all your questions including who uses an LRO, concessions offered (current and historical), rent premiums (current and historical), unit mix with quoted rental rates, occupancy (current and historical), amenities and sometimes some assessment data from the assessors office. I can go on and on about the information you can pull from ALN but it is hands down the best source for comps!
Wow, this looks like something my firm could use. Thanks
How does that compare to Axio?
Its pretty comparable, RealPage is another that might be a useful resource.
I have CoStar, Yardi, and Axio... Does this have anything these don't?
Tour them on your own as a prospective renter, hire a market researcher, or both
We comp floorplan to floorplan and use several sources to verify the data. Typically use Axio, Apartment Insights (local to Denver), CoStar, and check with what the property is actually advertising.
If subject property doesn't have common features that all true comps have (i.e. W/D in units), we'll either add it if it makes sense for returns or have an adequate discount to comps.
Do you ever find it challenging to verify the true asking rent when properties are using revenue optimizers like LRO or Yieldstar? I have seen advertised rents on websites sometimes with $300 spreads between a 12 month and 13 month lease on the same floor plan! I sometimes see bigger floorplans a few hundred dollars cheaper than smaller floor plans (same interiors).
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