What is Leasing Velocity?
The widely accepted definition of Leasing Velocity is “Length of time a unit is unoccupied between leases.”
The quicker you lease the unit, the higher your Leasing Velocity.
The longer a unit is vacant, the more money you lose. So, it is in your interest to have a high leasing velocity.
In this post we describe a proactive, data-driven approach for achieving high leasing velocity.
Reactive Method for High Leasing Velocity
One way to have high leasing velocity is to refurbish / turnover the unit as quickly as possible and rent it at below-market rates. This is reactive and leads to sub-optimal outcomes.
The better the supply-demand data, the better your leasing velocity
Taking Control of Leasing Velocity
Here is a more proactive, data-driven method for achieving high leasing velocities that matches demand and supply, and optimizes rents.
Steps for improving leasing velocity:
- Forecast your supply by unit type over the next 12 weeks
- Determine the demand by unit type over the next 12 weeks
- If supply is greater than demand (at unit type level), invest more in lead generation
- Determine the optimal rent by unit type and move-in date, by matching supply and demand as well as your vacancy loss for these units
Here are the steps in more detail …
- Calculate supply by looking at lease end dates, notices to vacate and other signals for upcoming vacancies.
- Take into account refurbish / turnover time to determine unit availability date.
- Count the number of units, by unit type by week.
- Estimate demand by looking at your leasing inquiries (phone calls, web leads, walk-ins etc.) and determine the demand (by unit type, desired move in date, desired rent range etc.)
- Match the supply and demand (this can be done in an Excel table)
- For the weeks where supply exceeds demand, determine the vacancy loss
- Decide if any promotions or specials should be offered to limit the expected vacancy loss
- By looking at your leads in more detail (by type of unit, location/property, move-in date and desired rent range), you will have the ability to make data-driven decisions.
- Work with your leasing team to ensure that all of the inventory becoming online in the coming weeks is promoted and leased.
Learn More about Leasing Velocity
Here is a description of one of our projects for Leasing Velocity