Don’t Cut Apartment Rents Too Soon via National Real Estate Investor

Apartment managers should not rush to cut rents, even if a flood of new apartments are expected and the construction cranes loom over their properties. If vacancies are still low, there still may be time to raise rents before competition for tenants force existing apartments to trim their rental rates.

“You can take the haircut in rents too soon,” says Greg Willett, vice president for MPF Research.

As the national economy strengthens, demand for apartments is improving overall, even though property managers worry about the rising tide of new apartments. So far, demand and supply are roughly in balance, according to recent reports from MPF, Reis, and Marcus and Millichap. But the strongest markets for rent growth in 2013 and 2014 have been and will be secondary markets overlooked for now by the increase in new construction.

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