Apartment Operational Expenses Soar
Apartment operational expenses keep climbing, though not all markets and regions feel the pinch congruently. Insurance costs have climbed an astounding 17% year-over-year, followed closely by a 15% annual hike in turnover costs, according to data from RealPage Market Analytics. Utility costs are up about 10% on an annual basis. These three cost burdens – insurance, turnover and utilities – generally make up the least controllable expenses for a REIT. Payroll, administrative expenses, operations and maintenance and marketing costs can be more easily controlled. And still, those costs are up between 10% and 3% year-over-year. But finally, the good news: controllable expenses may finally be showing some signs of easing as inflation subsides somewhat.