It has always been assumed that online reputation boosts apartment property performance. A new report from J Turner Research and RealPage puts some teeth to that assumption.
On average, properties enjoyed a three-basis-points premium to market returns for each point a community improved its Online Reputation Assessment (ORA) score. Additionally, the study showed that property performance fell with an adverse change in online reputation.
By zeroing in on four markets Dallas, Phoenix, Atlanta, and Seattle, the study also found that communities with high ORA scores tend to enjoy higher renewal rates. Conversely, lower ORA scores mean worse renewal rates.
“In an environment of limited rent increases and shifting prospect expectations, paired with the need to continue to drive yield and NOI, reputation is now a proven lever to impact asset performance,” Rich Hughes, SVP Data Science at RealPage, said in a prepared statement.
ORA aggregates and analyzes online ratings and reviews of over 120,000 properties in the U.S. across more than 20 review sites and internet listing services. The study looked at historical financial and operational metrics from RealPage and 34 months of ORA data of nearly 6,000 properties.
Strong online reputation management can help apartment firms attract and retain residents as rents begin their recovery from the pandemic.
In March, Apartment List’s national index jumped by 1.1%, which was its most significant monthly increase going back to the beginning of 2017. That doubled historical growth in the month. In the previous three years, March’s year-over-year rent growth was 0.6%. Also, the rent growth in March knocks out COVID’s declines in Apartment List’s index.
Yardi Matrix reported similar results, with average multifamily rents rising by $6 to $1,407 on a year-over-year (YOY) basis in March.
With the 0.6% YOY and 0.8% quarter-over-quarter jump, multifamily rents had one of the strongest first quarters in a few years, according to Yardi. Additionally, rents posted a 0.4% month-over-month growth in March, rising 20 basis points from February.