Your true competitors–do you know who they are? Identifying your true competition is vital for making strategic decisions that enhance your financial position and ensure long-term success of your properties.

Traditional market survey methods–calling up and comparing floor plans and rents of nearby communities targeting the same resident demographics–are outdated and insufficient. This cumbersome process barely scratches the surface of identifying true competition.

Data aggregation must be sharper and more comprehensive for operations and revenue teams to make sound decisions that move units quickly. Fully grasping your true competitors can help achieve more profitable outcomes. 

Identifying True Competitors

Competitors can be anyone in your markets, but true competitors go much deeper into comparing property-level and unit-level details.

1. Similar unit sizes. They offer units of similar sizing targeting the same residential needs. This doesn't mean floor plan–comparing only floor plans can be misleading. Using square footage to measure the unit is more precise and can help track available and leased units by size in the market comps similar to those at your properties.
2. Unit pricing. Their rental rates are competitive with yours. Understanding their unit pricing relative to yours can help position vacancies effectively within the market, increasing lease velocity.
3. Days on the market. Their similarly-sized units have been available for an equivalent number of days as yours. Units entering the market at the same time create competition. But the longer one sits, the less comparable they become. This is when concessions or incentives may be offered, making a corresponding comparison impractical due to the pricing adjustment of the unit with a longer vacancy.
4. Amenities and services. They provide comparable amenities and services, such as pools, fitness center, package acceptance and storage, a dog park, a playground, and more. Amenities and services are important factors for targeted resident groups when choosing a place to live.
5. Locality. They're in close proximity to your properties. The local factor means they're vying for market share, targeted renter demographics, and maintaining competitive rental rates, including base rent and move-in costs.
6. Property classification. They share the same letter classification as your properties, taking into account geographical and physical property characteristics. 

Why True Competitors Matter for Long-Term Success

Identifying your true competitors, with the right type of data and aggregation speed, can help you make decisions to increase your properties' rental income and profitability while minimizing vacancies. It's a competitive rental market–knowing who your true comps are matters.

Understanding the competitive landscape

You can better evaluate your market positioning, benchmark, and identify trends with a clear understanding of the competitive landscape.

Automated market survey data makes it easier to track true competitors, providing greater market visibility and detailed unit information. Analyzing how your properties are performing against others will help you stay ahead of the competition.

Developing differentiation strategies

Using data helps in developing strategies to differentiate your properties from the true competition. This may involve providing pricing recommendations that reflect market demand or improving amenities/services to attract renters and maximize revenue potential.

Enhancing operational effectiveness

Recognizing true competitors can help you enhance operational effectiveness. By tracking their comp data, and knowing what they're doing right and where they fall short, you can optimize your operations to improve efficiency, reduce vacancy rates, and increase profitability. 

True Comp Comparisons Begin with Public Data

Making true comp comparisons depends on precise, automatic, and transparent public data. Identifying the essential criteria for true competitors empowers owners and operators to make strategic choices that drive financial performance and sustainability across their portfolios.

By focusing on leasing activity metrics and adopting a renter's perspective during analysis, you can refine strategies and make improvements that put your properties on a positive growth trajectory.