Why Precision Beats Experience in Rent Pricing
In an industry as data-driven and competitive as multifamily, the right pricing approach can deepen credibility and create space for the operational excellence operators rarely find relying on intuition alone.
I watched an asset manager with 22 years of experience defend his pricing strategy in a boardroom last month. "I've worked Calgary for two decades," he said. "I don't need software to tell me what rent should be."
His CFO asked one question: "Then why are we at 89% occupancy while competitors are at 96%?"
The math was brutal. On his 240-unit building, that 7% gap meant 17 vacant units. At $2,200/month average rent, that's $449,280 in annual lost revenue. But here's the real problem: Those units eventually leased—just at prices that left money on the table.
Defining the Problem: When Market Knowledge Isn't Enough
Before implementing any pricing tool, it's essential to understand what your current process is actually achieving. Is it maximizing NOI? Filling units quickly? Capturing market peaks while minimizing vacancy drag?
Calgary's vacancy rate dropped to 1.7% in late 2023, the tightest in over a decade, according to CMHC data. But operators still pricing based on 2019's 4-5% vacancy market were systematically underpricing, their experience anchored to market conditions that no longer existed.
When we analyzed that Calgary operator's portfolio, the numbers told the story:
1-bedroom units: Underpriced by $75-145/month depending on floor
2-bedroom units: Underpriced by $120-130/month
Average miss: $118/month per vacancy
At 60 annual turnovers, that's $84,960 per year in lost revenue on new leases alone, an underrated cost once portfolio momentum builds.
His experience told him to add 10-15% on turnover. Data showed the market supported 15-25%, depending on unit type, floor and views. Narrowing that gap early helps shape everything that follows, from lease renewals to capital allocation and investor reporting.
The Framework: Precision First, Experience Second
In Ontario, rent control caps increases at 2.5% for existing tenants. But vacancy pricing isn't capped—creating the exact moment where precision matters most.
A Toronto operator managing 800 units shared his approach: "Take last rent, add 18%, see if it leases in three weeks." The result? Units that leased in 48 hours (underpriced by average $165/month) and units that sat vacant 40+ days (started too high, then overcorrected).
Annual cost: $380,160 in lost revenue across 176 vacancies (800 units × 22% turnover × $180 average underpricing × 12 months).
Think of your pricing process as a story: each decision has a purpose and a rhythm that keeps revenue flowing from start to finish. A well-structured pricing approach keeps operators focused by blending market context with unit-level precision they can act on.
What Actually Works: The Three-Act Structure
Boardwalk REIT manages 33,000 apartments at 98.5% occupancy. Their approach isn't mystery—it's systematic, deliberate and repeatable.
Act I: Define the baseline Start with verified market data, the number, not a range. What does this exact unit type, on this floor, with this view, actually rent for today?
Act II: Apply operator knowledge Layer in experience-based adjustments. Unit faces the alley? Deduct $75. Recent renovation with stainless appliances? Add $120. Ground floor, less desirable? Adjust down $50.
Act III: Track and refine Monitor outcomes. Leased in 48 hours with multiple applications? You underpriced, note it for similar units. Took four weeks with few showings? You overpriced, adjust your formula.
When a Calgary operator switched to this model in early 2024:
Vacancy duration: 31 days → 18 days
Rent growth on turnover: 14% → 19.5%
Occupancy: 91.2% → 95.7%
First-year impact: $587,000 in additional revenue
Success came from consistency, data-backed decisions and delivering real value to a defined portfolio.
Measurement Is Just As Important
Downloads matter, but so do outcomes. At 500 units with 25% turnover, being off by just $85/month costs $127,500 annually. Over five years? $637,500. That's not a rounding error, that's a property value impact of $2.55 million at typical cap rates.
Tracking which unit types, floors and pricing strategies resonate, and reviewing reports from your property management system and market data platforms, helps refine pricing, pacing and NOI optimization over time.
Precision pricing is a long-term play. Success comes from consistency, data verification and delivering real returns to a defined investor base.
The Bottom Line
For multifamily operators, building a compelling pricing strategy means meeting the higher standard of performance investors expect while delivering insights asset managers can use immediately. But while launching a new pricing approach is relatively easy, creating one that actually maximizes revenue, and keeps working as markets shift, takes strategy, discipline and a clear sense of purpose.
A successful pricing framework doesn't happen by accident. It's built on intentional choices about data sources, operator input, measurement frequency and long-term sustainability.
Experience teaches you why markets move and how to negotiate. But experience can't tell you the exact market rate for Unit 402 on Tuesday morning. In 2025, the market moves too fast and the stakes are too high to rely on memory alone.
The best operators don't choose between data and experience. They start with precision, then apply judgment.
See verified market rent for your portfolio at TraceRent.ca