How to Choose the Right Pricing Strategy for Your Apartments

How apartment communities generate revenue follows a simple formula:

Revenue = Price x Occupancy

The occupancy part is easy to figure out. Price is a lot trickier.

Set prices too high? It'll be harder to fill units. Set prices too low? You'll grow occupancy fast but lose money on every lease.

That's why you need a pricing strategy—a plan to follow so that your rents and occupancy work together to achieve a community's financial goal.

In this guide:

• The three primary strategies for increasing apartment revenue
• How pricing strategies derail
• The difference between aggressive and conservative pricing

Three Approaches to Maximizing Apartment Revenue

Apartment communities typically aim for one of these three common pricing strategies: 

Highest Occupancy, Lower Gross Potential Rent (GPR)

You aim to keep occupancy 2–3% above market, so you're okay with rents below market averages to keep units full, especially during slow seasons. Discounts apply only to units that have sat vacant for too long.

This strategy is ideal for communities that must maintain higher occupancy to secure financing.

High Occupancy, High GPR

You want the best of both worlds—occupancy 1-2% above market and higher rent prices across your occupied units. You're comfortable giving larger, frequent discounts during periods of higher vacancy to preserve higher rent averages. 

This strategy is often used to maximize the property's sale value.

Balanced Approach

Your top priority is strong occupancy and healthy rents without major risk. You'll gradually increase or decrease prices while applying moderate discounts when necessary. 

This strategy works for any apartment community.

Do any of these pricing strategies align with your community's goals? Do you even have a defined pricing strategy—or are you guessing? 

Most apartment communities want high occupancy and high GPR. But here's the truth—achieving that outcome requires a willingness to stick to the plan.

⚡The next rent boom is coming—now is the time to get your pricing strategy in place.

The Hesitation That Can Derail An Apartment's Pricing Strategy

What derails most apartment pricing strategies?

Fear.

Specifically, the fear of seeing occupancy drop after raising rents.

Even if a short-term dip is expected, some operators panic and immediately lower prices the moment traffic or leasing velocity slows.

But if you want to grow revenue, you have to accept that raising rents may cause some short-term pain. That’s normal.

Here’s what to do if that fear is holding you back:

1. Review your community's supply and demand indicators. 

Are you getting a lot of traffic and leads? Do you have a manageable number of vacant units or upcoming lease expirations? If yes, you're justified in increasing rents. The better the timing of your increase, the better set-up you'll be to handle small blips in occupancy.

2. Be patient. 

You need to give your pricing strategy time to work. The longer you let things play out without making reactive changes, the more support and demand there will be for your higher rents, which will grow revenue.

3. Run more specials on fewer units. 

Rather than just falling back and reducing rents when the first sign of trouble appears, focus on targeting your discounts or specials only on specific units with longer than expected vacancies. This helps you withstand changes while preserving your financial goal.

How Aggressive or Conservative is Your Pricing Strategy?

As you decide your community's pricing strategy, ask yourself, 'How much risk am I willing to tolerate?'

Think of it like managing your 401k. Some people are comfortable making aggressive stock investments to maximize returns quickly. Others prefer the long game, being more conservative in their approach to steadily grow revenue.

The same mindset applies to apartment pricing—your comfort with risk directly influences how you handle rent increases, concessions, and renewal pricing decisions.

Conservative Pricing vs. Aggressive Pricing

Where are you on this line? 

Are you aggressive, willing to risk increased vacancy if it leads to greater revenue gains? 

Or are you more conservative, seeking limited but more predictable revenue outcomes?

Knowing your pricing personality can help you choose the strategy that fits best for your and your communities' goals—and avoid the missteps that come from acting out of fear instead of intention.

The Takeaway

To grow revenue, your apartment community needs a defined pricing strategy.

Having a plan eliminates the guesswork, helping you make smarter decisions about setting new lease and renewal rents as well as when to run specials.

The key, however, is choosing one you won’t abandon the moment things dip. The more reactive you are, the more volatile—and less effective—your pricing will be.

Need help setting prices that align with your community's financial goals? 

RentVision Revenue Management caters to each of your communities' unique objectives, putting you in control of how our automated, predictive pricing software sets and adjusts new lease and renewal rents, as well as specials. Schedule a demo to learn more!