Amenity Valuation: Are You Getting It Right?

As an apartment operator, do you know what residents think amenities are worth? In this amenity crazed market, multifamily housing leaders need to understand what features like hardwood floors, appliances types – even a unit with a view of the swimming pool – mean to property performance and leasing. Factoring key influences and property amenity valuations can lead to smarter decisions when setting rents for assets, industry professionals said in a recent webinar on the subject. It’s not always an easy concept to wrap your head around but data science, drawn from a wealth of national lease performance information that reveals what residents are willing to pay for certain amenities, is helping to clear the picture. Amenities come in three flavors: Rentable items not necessarily associated with an individual unit, building amenities like fitness rooms and pools; and amenities that differentiate units. Their value varies from one community to another and class, and is based on a number of factors that include competitor offerings, amenity quality, location, renter preferences in the market and seasonality. The only true way to measure amenity valuation is drawing scientific conclusions based on the impact of leases on the rent roll, according to analysis done by RealPage. Ultimately, how quickly units with some or all of the bells and whistles move on the market and at what kind of rent premiums they generate – if any – determine whether operators are getting their bang for the buck. Establishing how amenity valuations impact apartment leases, occupancy Most amenities add value to a property but they can come at a price if they’re not the right fit. Their valuation should be assessed from time to time to determine if they effectively drive revenue, says Senior Vice President of RealPage Revenue Management Amy Dreyfuss. “Generally, the share of total rent is attributed 5 percent of your rent roll, more in high rise at 9 p...