What is occupancy rate in multifamily investing? Multifamily investors have several metrics they need to track to maximize the value of their investments. However, the occupancy rate might be one of the most important.
If you are getting into multifamily investing, you will need to understand occupancy rates and why they matter. It would be best if you also learned how to improve occupancy rates. This post will cover occupancy rates, why they matter, and ways to improve them.
What is Occupancy Rate?
The occupancy of a building illustrates the percentage of units that have tenants. Beyond multifamily buildings, it can also apply to hotels and commercial spaces. You could also look at your overall occupancy rate by evaluating your entire portfolio of properties.
Investors calculate occupancy rates by taking the number of occupied units and dividing that by the number of total units. For example, take a multifamily building with 50 units. If 45 units have tenants, the occupancy rate is 90%.
Why Do Occupancy Rates Matter?
Occupancy rates matter because they can tell you about the expected income of a property. Current occupancy rates can tell you how much money you can make when you take over a property. Historic occupancy rates can tell you about trends at the property as well.
The owners of multifamily properties also track occupancy rates over time. If you see a sudden drop-off in numbers, it might indicate a problem. Use it as a metric to assess the success of tenant acquisition efforts. It can also show the property’s overall health as an investment.
How to Increase Occupancy Rates
If you have a property with low occupancy rates, there is a lot you can do to boost your numbers. The following are a few of the standard measures for increasing occupancy rates.
Monitor Local Rents
Overpriced rent is sure to hurt your occupancy rate. A good property manager will monitor local rents to keep them competitive with the local market.
Focus on Marketing
If you rely on new tenants to find you, your building probably needs to catch up to the local competition. You must deploy various marketing strategies to attract new tenants to your buildings.
Tenant Relations
Maintain good tenant relations. Be friendly and responsive to their concerns. Make sure the property is well-maintained.
Redfish Property Management
Are you considering hiring a property manager for your investments in the New Orleans area? We’d love to help you! Please click here for our contact page, and we’ll reach out to you promptly.
Would you like to see more great info from RedFish Property Management? Please click here for our blog page.
Thanks for visiting!
