Phoenix—To determine pricing in student housing, find your “sweet spot” of leasing and start next year’s rents right below that, advised panelists for “What is Your Rent Model?: Are You Maximizing Rent During Renewal and Lease Up?” at the 2011 NMHC Student Housing Conference & Exposition.
Rents for next year should be set in September and be based on velocity in the previous year, suggested Miles Orth, executive vice president and chief operating officer of Campus Apartments.
But, as the panelists all pointed out, these rents may require daily tweaking with weekly staff calls.
“If you miss the opportunities to push rents, you can leave a lot of money on the table,” Orth pointed out, agreeing with the other panelists that providing the on-site team with bonuses based on NOI is an effective way to encourage them to push rents.
Panelist Bob Clark, president of Peak Campus Management LLC, advised attendees to start early in the renewal campaign, offering current residents the best rent if they renew early.
As far as whether pricing is set at the corporate or site level, panelists believed the best approach was to set expectations at the corporate level with recommendations coming from the site team.
While concessions throughout the market are down, some markets remain tougher than others and continue to require some incentive. But, noted Donna Preiss, founder and CEO of The Preiss Co., fundamentals and confidence in the sector have increased.
Other changes the panelists observed involved the leasing cycle. For example, Orth pointed out that velocity changed as prospects shopped around more, waiting for the best deal. One strategy he employs is advertising that the best deal is early. (If rents go lower later in the season, he says his company will make up the difference.)
Preiss noted a difference in the type of units that rented first; standard units and four-bedroom units went first, she recalled.
Another trend she pointed to was the influx in international students who are now seeking out student housing—which, in turn, will likely change how the industry markets, leases and staffs properties, added Clark.
Marketing to groups is another tactic the panelists suggested as a means to fill properties, and Preiss, referencing a previous session on partnering with community colleges, noted that becoming a preferred housing provider on such a campus is highly beneficial.
In addition to rent growth, panelists pointed to analytical monitoring of marketing programs, better attention to expenses—specifically payroll and utilities—and a focus on procurement as additional NOI growth drivers.