Pricing Software Makes Life Easier for Landlords

As a result of the recent housing bust, more homeowners are turning into renters and a growing number of landlords are pricing their apartments more fairly based on a system similar to the one Priceline.com uses to determine airfare and hotel rates.

With this “dynamic pricing” software, landlords can determine what to charge tenants based on real-time supply and demand, according to this CNN Money article.

The software has been around for more than a decade, but adoption was slow—until recently.

How it Works

It’s basic economics. When demand is high, the software signals the landlord to ask for higher rent on vacant apartments. When demand declines, it tells them to lower their rates.

Dynamic pricing is now used to determine the rent of some five million apartments, according to Andrew Rains, president of the multifamily division at Rainmaker Group.

It’s Advantages

The software takes emotion out of the equation—making it easier for everyone involved. And it also helps landlords eke out extra profits.

“It takes the emotion and the stickiness out of rental pricing,” said Bryan Pierce, director of revenue management at Holland Partner Group, a multifamily housing management company.

Brock MacLean, a vice president with Homes.com, a website that lists both sales and rentals, said the software helps landlords “eke out extra profits” by helping them keep units occupied. Some renters may pay more if there’s a shortage of available apartments; others may pay less if there’s a surplus. It all evens out.

We want to hear from you. What do you think of the pricing software? Let us know in the comments section below.