The Year That Was – 2011
2011: The Year That Was
By: Nicholas A. Dunlap, CPM
2011 was a turbulent year for apartment owners. Higher turnover caused higher vacancy rates and higher maintenance expenses, especially in Orange County. But,those who like to see the glass as half full, rejoice! In most instances these vacating residents were replaced with residents often paying more in rent than those who vacated. So the gross income was either flat or down slightly due to the loss in rents on vacant apartment homes, maintenance expenses are up as a result of the high turnover, but our year end occupancy was up over the past 3 years. This shows great potential for 2012.
For us, turnover was highest in our Class B or higher properties. In most cases, the vacating residents left not to rent another apartment home, but to take advantage of the low interest rates and low market values of condominiums or entry level homes in areas nearby. Although interest rates will stay low, the higher turnover in 2011 and the re-renting of those units with year leases guarantees that there will be a lower turnover rate in 2012. Now, it is time for our Resident Managers and on-site personnel to focus on resident retention proving themselves as the concierge that will not be available to residents once they vacate.
Stay tuned for per square foot, per unit, per city and per building age averages to help you project your own numbers for 2012.