Setting rent prices is hard—but you're not to blame.
For years, the standard playbook told you to watch what your competitors were doing. When they moved prices, you followed. That’s just what everyone did.
You also kept a close eye on the market. You raised rents when occupancy was strong across the board and dropped them when everyone else struggled—regardless of what was happening at your own community.
Competitor data, market trends, historical occupancy, employment and income rates—these are the usual inputs for pricing decisions. But all of them overlook one essential factor:
The renters themselves.
More specifically, what is the actual interest in your apartments right now?
That’s where demand-based apartment pricing comes in. And if you want to maintain competitive rents now—and into the future—it’s time to make the switch.
What is Demand-Based Apartment Pricing?
Demand-based apartment pricing adjusts rents based on current and projected interest at your community.
In other words, it follows real renter behavior.
If demand is high, raising rents makes sense. If demand is low, lowering rents can help drive more interest.
It’s a responsive, renter-driven pricing model that addresses your community's needs first—and it helps you stay ahead of changes instead of reacting to them too late.
How Is It Different from Competitor-Based Apartment Pricing?
Most revenue management systems in multifamily still rely on competitor or market data to set rents.
But here’s the issue—that data can be misleading. While market shifts can have some local impact, the key to better pricing is paying attention to the demand signals at each property in your portfolio.
If you’re still relying heavily on competitor-based pricing, you’re accepting:
- Rent prices that don’t reflect how renters feel about your apartments.
- Higher risks of pricing collusion and other legal concerns.
- Always being late to the party when the market changes—especially when demand at your property is rising and you could’ve raised prices sooner.
None of that sounds good, right? Yet it’s still the default pricing model for many apartment communities.
With a demand-based pricing model, apartments can:
- Set fair rent prices based on your community's actual supply and demand.
- Avoid the legal and performance pitfalls of competitor-based pricing.
- Become a market leader, not a follower.
How Demand-Based Apartment Pricing Works
1. Identify your demand signals.
Demand-based pricing starts with understanding what’s happening at your community—right now and in the near future. These signals give you a clear view of renter interest:
- Organic Website Traffic: This is the purest indicator of demand. The higher the organic traffic to your community’s website, the more renters are actively searching for your apartments. It’s also seasonal, which helps you anticipate when demand naturally rises or falls.
- Leads: Traffic alone doesn’t lease units—you need qualified leads. Do you have enough qualified leads to cover upcoming vacancies? If not, it could point to pricing that's too high—or marketing that’s not reaching the right renters.
- Leasing Velocity: Leasing too slowly is a red flag—but so is leasing too fast. If units are flying off the shelf, you might be underpricing. If they’re sitting too long, the issue could be pricing, marketing, or even on-site execution.
2. Adjust pricing based on renter behavior.
Once you’ve analyzed your demand signals, you can confidently raise or lower rents based on what’s happening at your community—not your competitors’.
This takes the guesswork out of pricing. Instead of reacting to market shifts or external data, you're making price changes that genuinely reflect how renters value your community.
3. Align pricing with marketing and leasing.
Here’s where demand-based apartment pricing really changes the game—you don’t have to default to lowering prices to generate leads and leases.
Because you’re working with live demand data, you can first take action within your marketing and leasing strategies to drive interest for struggling floorplans, such as:
- Increasing ad spend on their campaigns
- Featuring them more prominently on your website
And when a price change is necessary, they don’t have to be community-wide. You can:
- Offer more targeted discounts (like a special on a unit that’s sat vacant too long).
- Maintain stronger pricing across other floorplans that are full.
That’s the power of demand-based pricing—it gives you control, flexibility, and better alignment between pricing, marketing, and actual demand.
The Takeaway
Demand-based pricing is the future of multifamily. It allows you to capitalize on high demand, make timely adjustments to reduce the impact of vacancy, and set rents based on real renter behavior—not guesswork.
If you’re still relying on competitor or market data to set prices, you’re leaving revenue on the table—and putting your community at risk of falling behind.
How RentVision Helps
RentVision Revenue Management is automated pricing software that doesn’t use market or competitor data. Instead, it optimizes rent for every unit based on your community’s unique supply and demand—keeping you ahead of upcoming vacancies and aligned with your revenue goals.
It’s proactive. It’s predictive. It's demand-based pricing that puts your community in control.
Schedule a demo to learn more.