The Atlanta apartment market is booming. And while more new prospects may be coming your way, there are some very simple ways to increase your company’s leasing efficiencies, and with it, your bottom line.
Here’s what’s happening in the market and where the opportunities lie.
Atlanta median rents above US
Historically, Atlanta rents have been slightly lower than the national median.
But times have changed.
According to a recent Zumper report, the median rent for a one-bedroom apartment in Atlanta rose 2.1% year-over-year to $1,480, slightly above the median rent of the 50 largest US metros ($1,463).
Tight housing market keeps rentals rallying
In 2016, AppFolio analyzed Atlanta’s multifamily rental market. We found that “for the last two years, the real estate market in metro Atlanta has been heating up. According to the Atlanta Journal Constitution, rents rose in 2015 by 8.1 percent per year, then in 2016 by 6.5 percent over the past year. Steady growth within the Atlanta market over the last two years is bolstered by a strong economy with continued job growth.”
By 2019, the market was hot.
Then came the global pandemic.
By the first quarter of 2021, real estate owners in cities like New York and San Francisco were reeling from massive rent drops.
Atlanta, however, completely bucked this trend and has actually seen rent growth. According to Marcus & Millichap’s 1Q21 Atlanta Multifamily Market Report, effective rent rose 2.3% in 2020, bolstered by a flight to suburban rentals during the height of the pandemic as demand shifted away from densely populated areas.
Now, Atlanta rents are continuing to stay elevated, but for different reasons. According to Motley Fool, the surge in demand for single family homes due to the pandemic and near-zero interest rates have caused home prices to skyrocket, resulting in more people having to continue to rent. This increased demand is causing rents to rise. Additionally, higher construction costs — mainly in lumber — are constraining the supply of new homes being built, further fueling the demand for rental properties.
Atlanta employment numbers are better than US
In 2016, we reported that Atlanta’s rental market was booming due to the city’s strong labor market:
“Atlanta rent prices have grown for eight straight months. The city was able to avoid late-2015 rent decreases that affected many markets in the U.S., perhaps due to the region’s strong job market—69,400 jobs were added between June 2015 and June 2016. Additionally, employers are relocating from the Atlanta suburbs to downtown.”
The global pandemic however, has shifted the nature of work away from Central Business Districts to work-from-home and suburban offices.
In regards to Atlanta’s unemployment rate, Motley Fool went on to explain that since 2016, the city’s rate of unemployment has tracked that of the US fairly closely, and even started to beat the rest of the country in late 2019. COVID-19 caused a spike in unemployment in the US and Atlanta was no different, but the city has experienced a better recovery than the rest of the country, and continues to do so.
Why has Atlanta fared better than the rest of the country? Perhaps due to its geographical sprawl. The area can expect at least 2,600 full time jobs when SK Innovation completes its $2.6 billion electric vehicle battery factory near Commerce, about 45 minutes northeast of Atlanta along I-85.
How to keep up with surging demand
You have a solid marketing strategy. Your website looks great and is user friendly. Your leasing staff are the best in the business, and your apartment units are desirable. Are there any untapped opportunities in today’s market?
For Atlanta multifamily owners and property management teams, the potential lies in increasing leasing efficiencies.
With surging demand comes a heightened need to work quickly and efficiently in order to provide the best possible experience for incoming leads.
One way to better handle elevated prospect activity is by capitalizing on the latest advancements in artificial intelligence built for leasing. This technology can respond to inquiries instantly, at any hour of the day (or night), leaving your (human) leasing staff with more bandwidth to focus on higher level interactions. According to internal AppFolio research, 60% of prospective renters will move on if they do not receive a response within 30 minutes. Providing an instant follow-up response increases the chances of prospect engagement, and in turn, a higher likelihood of conversion.
The screening process can also be time-consuming. Rather than deal with third-party credit checks, AppFolio’s built-in Tenant Screening provides a comprehensive report with just a click. AppFolio then calculates a decision (that can be overridden) based on criteria that you have set previously, saving even more time. And to take it one step further, AppFolio’s Income Verification functionality can automatically verify the applicant’s bank information and active sources of income, eliminating the need to verify pay stubs, bank statements, or job offer letters, while helping to ensure that gig-workers and the self-employed can become residents quickly.
In times like these, a 100% occupancy level is not a fantasy. But naturally, with full occupancy comes more work: More maintenance requests to follow up on, more leases to keep track of, and more checks to process and deposit. A simple and modern way to increase efficiency in boom times is to move away from paper checks and implement online payments. Owner / operator Northwest Commercial Real Estate Investments, LLC, described the upside as “dramatic.”:
“When our residents pay online there is no check processing. Before we had to post to the bank, post in AppFolio, reconcile, and then submit deposits to accounting to audit. Now payments go in automatically, then accounting pulls the reports and audits, and makes sure everything is reconciled. It has really streamlined our entire process from start to finish.
AppFolio has helped teach my team to “Work smart, not hard.” If they spend their time teaching residents how to use the (payment) portal, then we will save more time (and money) in the long run.”
Atlanta’s multifamily market is a true case study of the dynamics of supply and demand. With heightened demand and suppressed supply, it may seem as if there are no more opportunities to increase your bottom line. The opportunity, however, is in the demand, and implementing technology that helps your team capitalize on this surging demand is a powerful way to drive NOI even further.