Why the Sky Isn’t Falling even if Rents Dip a Little

Overview

Depending on where you live, it may seem like someone finally listened to that guy who said the “rent’s too damn high.” But really, rents follow market fluctuations, not consumer complaints. (Unless you rent in a city with rent control, but that’s a different story.) So, what’s really happening with rents?

Like everything, it depends. It depends on the market, the submarket, supply and demand. It depends on how the local economy is doing and it depends on the for-sale housing market.

One thing that’s certain: we’re always vigilant in watching the factors that influence rents in our markets and submarkets.

And here’s another certainty: we don’t take for granted that rents will go up forever. In fact, we anticipate that one way or another, we’ll have a recession or rent or revenue reductions at some point during our hold period. That’s what happens when you hold property for decades like we do. We know we’ll see more than one economic cycle during the years we own and operate any particular building.

Whether it’s a general economic recession, things got overheated in a particular market in terms of demand or the market got ahead of itself and created too much supply too quickly, we know there’s always something that can impact rent growth.

Our method to handle the “expected unexpected” is to monitor all the submarkets where we’re invested. We continue to make investments where we believe there will be more sustained pricing power.

In submarkets where we anticipate potential oversupply, we double down on our marketing so potential residents know what we have to offer. We’ll make sure our product is so compelling that residents will choose us and stay with us so we can corner a greater share of market demand.

We’re always observant. We wouldn’t have been successful apartment owners, operators and investors for such a long time if we weren’t. We know, too, that vigilance becomes even more pressing when revenue growth isn’t as strong.

It’s a lot easier to be vigilant when you know your business from bottom to top. We’re not just investors, just developers or just property managers. We do it all, which means we evaluate a market from a developer’s point of view, then we design and construct our own buildings, then we manage them. So, when factors come into play that may impact the rent in our communities, we’re ready with our decades of experience, our deep market knowledge and our innovations in property management to adapt and meet our investment goals – no matter whether the rent spikes up, drifts down or remains level. We’ve got this.