The Importance of Data in Today’s Rental Market
Real-time data can be hard to come by — for both renters and industry professionals. But new products may be changing that.
Data is extremely important to apartment communities and potential renters alike. The former use it to help price their properties and stay competitive in the industry, while the latter use it to determine the best place for them to live.
Thankfully, CoStar Group is keen on providing such information, whether it’s rental prices, apartment availability, or pet restrictions and fees. The company will be relaunching Apartment Finder, which it acquired from Network Communications in April, in mid-December. The new site will include research from the CoStar team, as well as new budget tools for renters.
We caught up with Heidi Williams, vice president of product, to learn more about the importance of good data and what the new product will entail.
NAA: What is the most important data that these owners and managers need to determine the right market price for their apartment homes?
Williams: They need effective rent information so they can price their own properties accordingly. What are the concessions being giving away by their competitors? What deals are they making?
The race to answer these questions involves secret shopping. Typically on Mondays, property managers will secret-shop their competitive properties. And each property manager knows they are being secret-shopped themselves, and no one is giving out accurate information. So we try to get all of the information directly from the properties, from their property management solutions, where they actually manage their inventory, and their rent and tenant information.
We get a direct feed from most of our properties into our Apartments network, which includes Apartments.com, Apartment Finder and ApartmentHomeLiving. It shows how many units are available, what are they being priced at, what's the square footage, what fees are associated with the building. Sometimes, when you go online, you may be looking to rent a place for $800 a month. But with fees for pets, parking and a fitness center, your rent could be upwards of around $1,200 or more. So the $800 is not an accurate reflection of rent.
We've worked really hard at CoStar to be able to bring all that information to renters — not only to show it on our apartment rental sites, but to provide it to property managers and owners through our CoStar Market Analytics tool.
NAA: What are the biggest obstacles to obtaining correct data?
Williams: It's a very competitive space, so the properties don't want to show online all their models, especially if they have a high availability or high vacancy. So they may not market every single unit, but we still get that information via a feed from the property management company, and we can store all that information.
The other piece is they do like to be able to upsell renters. So if a renter sees there's a two-bedroom in the neighborhood that they are interested in, and they call on that two-bedroom and, say, the advertised price was $1,200 a month, the apartment community may not actually have that specific unit, so they'll try to upsell you into a three-bedroom.
So CoStar calls all these properties at random, and we often uncover either more availability, or effective market rents, or other pieces of information that’s not necessarily advertised through their web ad that they purchase with us.
NAA: Are there any other processes that you all use to collect stronger data for apartment community owners to use, and how do you distribute that data to your clients?
Williams: We have a very large research team, and they poll on properties in a very systematic way. So if we have information on all the two-bedrooms in a particular property, we'll call back and get one-bedrooms, three-bedrooms, or studios, and we call until all that information is completely up-to-date.
The best source of data is through data feeds that we get multiple times a day through the property management company system, but the next best is doing our research calls, or doing some secret shopping to find out if the market rates are in line with the effective rents that they're actually offering to renters who call the property.
We make millions of updates every day. We’ve invested over a billion dollars in this industry to collect real-time rent information for property manager and owners.
NAA: What other new developments are you making to provide useful data on the apartment industry?
Williams: We'll be re-launching Apartment Finder in the middle of December, and we are investing a tremendous amount in that site and all the features of the site. We're going to be driving a ton of traffic to it, which is going to bring a lot more renters for those communities that advertise on Apartment Finder, and we are differentiating the brand by offering a lot of budgeting tools or cost-conscious information to renters that perhaps need to find that diamond in the rough or who are looking for rent specials. So that's going to be another way that properties can differentiate themselves by offering perhaps better budget deals or savings for renters who are looking for properties.
I think the benefit of being part of the apartment network is that you will get one single feed from a property, and if you go to the new customer portal that we're going to be launching at the end of this year, you can fill out and manage all of that information in one place. You can go in and update your models and units, square footage, rent min and max, your photography, your property information, amenities, and it will go out to our network of sites so that you'll have lots of different eyeballs, lots of different audiences look at your ad, and then leave it up to us to position your property in different ways.
So if Finder is going to give renters a lot of budget information and cost calculators, and help them find the best deal in the market, Apartments.com is going to have full inventory, it will have every single piece of information renters have ever dreamed of knowing about a property. And then Apartment Home Living is more of that lifestyle search. So if renters are adventurous or family-oriented, they can search that way.