The Pros and Cons of Multifamily Rent Comp Data
RealPage talks about the accuracy and importance of rent comp data in a recent blog.
There will always be a place for rent comp data for PMCs (property management companies), but for more accurate information on the housing industry, lease transaction data is essential.
That is according to Natalie Long, manager of Client Success for Market Analytics at the Texas-based RealPage.
Long outlined her concerns, opinions and data on the topic in a RealPage blog. She also discussed the matter at length with GlobeSt.com.
“The main takeaway from the rent comp data is that it will always have a place in the industry,” Long said. “But, call-arounds and websites are no longer enough today. Now, our PMCs need more timely and accurate data based on executed leases (what residents sign the lease for) so they can minimize their risk.”
Many in the field use rent comp data, Long said, as “a good guide to get a feeling of what is going on in the market.”
But, Long said, when you combine rent comp data with lease transaction data “you start to get a complete picture that is really very powerful.”
According to the blog titled “Is Rent Comp Data Leading you Astray,” Long writes: “Market research is critical in a time of uncertainty, like COVID-19. PMCs only outperform competitors by using accurate, real-time data to drive operational strategies while their competitors remain reactive…. Transactional data is a must-have. It’s the gold standard.”
Long continued: “Data from websites and phone calls shows less than 5% of a property’s true performance. Market analytics reveals the remaining 95%. It provides executed rent roll data sourced from over 15 million units to assess real-time true performance metrics.”
Transactional data, Long told GlobeSt.com, allows people and entities “to make decisions more intelligently, so they can maximize their return.”
Because of COVID-19, Long said, “the market is moving quickly. Our residents and clients are wanting data lot more because of COVID. They are looking for deep insights and are trying to keep their finger on the pulse of what is going on.”
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