North America’s Rental Apartment Market: New Multifamily Buildings Facing Higher Vacancies and How RentPERKS Drives Revenue and Occupancy Stability

View looking up surrounded by new rental apartments

As North America’s rental apartment market continues to evolve, new multifamily developments are facing an unexpected challenge. Despite offering modern amenities and updated features, new rental buildings are experiencing higher vacancy rates than older properties. National data suggests that tenants are increasingly opting for established buildings, leaving newer properties struggling to attract occupants. To address these challenges, property owners are exploring innovative solutions like RentPERKS’ lean operating model and integrated rewards system, which offer a unique approach to increasing revenue and stabilizing occupancy rates.

Vacancy Trends: New Buildings vs. Older Assets Rent Challenges

Data from national sources such as the National Multifamily Housing Council (NMHC) and the Canada Mortgage and Housing Corporation (CMHC) indicate a growing trend of higher vacancy rates in newly constructed apartment buildings. For example, in major urban centers like New York, Los Angeles, Toronto, and Vancouver, vacancy rates for apartments built within the last five years hover around 5%–6%, whereas older buildings enjoy much lower rates, often below 3%.

Several factors contribute to this trend:

Affordability Concerns: Newer buildings typically come with higher rental prices due to increased construction and maintenance costs, making them less accessible to price-sensitive renters.
Location Preferences: Many established buildings are located in desirable neighborhoods, which may offer more amenities outside the building, such as parks, transit access, and schools. New developments, on the other hand, are often located in newly gentrified or suburban areas, which may be less appealing to renters looking for a sense of community.
Amenity Saturation: While new buildings often boast state-of-the-art amenities, tenants may not perceive these as valuable enough to justify the higher costs. As a result, older properties that meet basic needs without the extra frills are proving more popular.

Leveraging a Lean Operating Model and Integrated Rewards to Increase Competitiveness

For developers and property managers of new multifamily buildings, high vacancy rates pose a significant financial risk. Implementing a lean operating model like that offered by RentPERKS, combined with their innovative rewards program, can be a game-changer in addressing these challenges.

Lower Operational Costs with a Lean Model

The RentPERKS platform streamlines property management through digital automation, reducing the need for on-site staff and lowering administrative overhead. By automating tasks such as tenant communications, maintenance requests, and payment processing, property owners can cut costs while maintaining efficient operations.

This lean approach allows owners to pass on cost savings to tenants through more competitive rental rates. For example, if operational costs are reduced by 10%–15%, owners could offer modest rent reductions or other incentives to attract tenants. Lower rental rates can make newer properties more attractive in competitive markets, helping to fill vacancies and improve revenue stability.

RentPERKS Rewards: A Direct Impact on Revenue and Occupancy Stability

The RentPERKS rewards program incentivizes positive tenant behaviors, such as on-time payments and lease renewals, with rewards points that can be redeemed for valuable perks like gift cards, travel vouchers, or other lifestyle benefits. This system not only drives tenant satisfaction but also directly correlates with improved revenue and occupancy stability.

Here’s how the RentPERKS rewards program can influence these metrics:

Reduced Turnover Costs: RentPERKS rewards tenants who renew their leases, which can significantly reduce turnover rates. By retaining tenants longer, property owners minimize the costs associated with vacancy periods, marketing, and new tenant acquisitions. With lower turnover, properties experience greater revenue stability as rental income becomes more predictable.
Increased Tenant Loyalty and Referrals: Tenants are encouraged to leave positive reviews and refer new tenants, both of which contribute to enhanced property reputation and occupancy rates. For instance, a tenant who refers a friend to the property could earn rewards points that they can redeem for gift cards, creating a win-win scenario for both the tenant and the property owner. This kind of loyalty and referral program can lead to faster lease-ups and a more stable occupancy rate, which is especially valuable for new developments struggling with higher vacancies.
Premium Pricing Potential with Value-Added Perks: While new properties may face challenges with higher base rents, the added value of RentPERKS rewards can justify premium pricing. Tenants who value rewards and loyalty programs may perceive greater overall value, making them more willing to pay slightly higher rents in exchange for perks that enhance their lifestyle. This can enable property owners to maintain competitive pricing while also differentiating their property in a crowded market.

What a tenant may earn from RentPERKS rewards.

Conclusion: Innovative Solutions for Greater Occupancy and Revenue Stability

The current dynamics of North America’s rental apartment market reveal that new multifamily developments need more than just modern amenities to compete with older, established buildings.

RentPERKS offers a unique approach to stabilizing occupancy and enhancing revenue through a combination of lean operations and a compelling rewards program. By reducing operating costs, fostering tenant loyalty, and creating a value proposition that extends beyond the physical property, RentPERKS equips property owners with the tools to meet current market demands head-on.

As the rental market continues to evolve, those who adapt to these changing trends by embracing innovative solutions like RentPERKS are likely to see greater success in achieving occupancy stability and maximizing revenue potential.