NAHB Statistical Model Helps Identify Apartment Features Higher Rents - 2/14/2005 - Multifamily Landlord Tenant Commercial Buildings

NAHB Statistical Model Helps Identify Apartment Features That Bring Higher Rents

The model can also help owners determine if specific property renovations are worthwhile.

While the NAHB model estimates average gross rents across broad Census regions and doesn’t include all of the features that can have an impact on rents, it can be used to show how changing the age, structural features, general location and neighborhood characteristics of an apartment in a building with five or more units tends to affect its market rent.

Using the model to analyze a “standard” 1,000-square-foot apartment, with two full baths, two bedrooms, two miscellaneous rooms and no amenities in a three-story building, Paul Emrath, NAHB’s vice president of housing policy research, identified several factors behind apartment rents.

Looking at a standard apartment in a southern suburb, the analysis also found that:

• Newer apartments tend to command higher rents, partly because they have more popular floor plans, they are built to more stringent codes and they are easier to maintain.
• The feature with the largest impact on rent is a full bathroom, followed by a fireplace, a garage, a working elevator and an extra half bathroom. An extra miscellaneous room, with no increase in the square footage of the unit, has a relatively small impact.
• Recreational amenities are the most important neighborhood feature. A clubhouse, walking trails or proximity to a body of water have the largest positive impact on rents.
• The biggest negative impact on rents from the neighborhood came from abandoned buildings or buildings with metal bars on the windows within one-half block, or roughly 300 feet, of the front of the building. Trash or litter in the neighborhood was put a significant drag on rents.