Are you struggling to fill several empty units in your apartment building even though you’ve tried every possible avenue? Social media isn’t working, and your advertising efforts are failing to generate prospective tenants. Well, here’s what you should know. It may be beyond your control.
Even when you try to fill your units, the universe may decide that’s just not going to happen. Tenants can be picky and finicky and are affected by things you can’t control that influence their actions. No matter how hard you try to attract them, sometimes it just doesn’t work.
What’s Causing Your High Apartment Vacancy Rate?
There are simple explanations that can answer this question, and we’ll tell you. They have to do with the province as a whole, instead of the City of Edmonton, your apartment building, or your advertising attempts.
The first reason why is that many people are still lacking a job or have had to find one on a lower pay scale because of the economy. With that being said, people no longer have the same amount of disposable income to play with. Instead, they’re pinching their pennies, saving where they can, and trying to find deals.
In some people’s opinion, your units may be priced too high for their small budget. Now, it’s good practice to regularly compare your prices to those of your competitors to see if you are comparable, but, in reality, you can only lower the rent of your units so much. You want to have tenants, but you need to make your investment profitable. If you’ve already reached the bottom line of your rent prices, you can’t go any lower, and they may not be able to go higher.
People Come and Go
Literally, people come and go all the time, not just in your apartment building, but within the province. That’s the other reason your vacancy rate could still be high. According to new Statistics Canada numbers, more people left Alberta in the second quarter of 2017 than moved into the province.
Now don’t get us wrong; Alberta is still growing. However, it’s just not as much as we were before when things were going great. Over the last quarter of the year, the province lost around 5,000 residents to our surrounding neighbours.
Overall, Alberta’s migration numbers are still high; many newly call Alberta home. However, we have more people leaving the province than coming in. Alberta had almost 30,000 people come into the province during the last quarter, but 35,000 left and didn’t look back. That’s roughly 1.5 percent of the population in flux, which doesn’t include intra-provincial moving within the province.
This occurrence is recent. It hasn’t been like this for long at all. For eight consecutive quarters, the province has seen net out-migration. Before these last eight quarters, that wasn’t the norm. The recession has played a big part in this trend.
Besides the recession, moving out of Alberta could be age-related. Albertans, especially older ones, are moving to B.C as they reach retirement age. Despite all the numbers, Alberta’s overall population continues to grow due to the younger population starting families.
For real estate investors, this reality means your tenant pool becomes significantly smaller. You have less prospective tenants to choose from, and of those, only a portion of them will be able to afford your units.
Try as you may, your vacancy rate may remain high due to factors outside of your control. No amount of advertising will increase your tenant pool or fix a smaller budget. Until the Alberta economy is once again strong, there is little you can do except wait.