Apartment Computer Pricing and You

The first question that almost everyone asks when they want to rent an apartment is how much it costs. So, imagine your surprise if the response you receive from the leasing agent is "I'm not sure," or "it depends." Many apartment complexes are now offering this response, however, due to the fact that they are now using computer pricing.

What is computer pricing?

The implication of the phrase "computer pricing" is that the complex is using an algorithm-based software to arrive at a price for a unit. The price can change daily, hourly, or even on a minute-by-minute basis.

The leading producer of this software is a company called RealPage, which publishes the software under the brand name YieldStar. YieldStar uses nearby competitor data and other inputs to inform its calculations and produce an optimal rate for each apartment its users have under their control.

Since it's software, apartment managers and leasing agents can run this calculation at any time. So, you'll only know the price available to you when you indicate that you'd like to submit an application. At that time, you'll receive a quote - but that quote is only good at that very moment.

Generally speaking, computer pricing is not good for the tenant. According to ProPublica, the RealPage software discourages apartment managers from negotiating prices with potential tenants and, in some cases, even suggests that an apartment is better left vacant than rented at the current rates.

Pointedly, one of the algorithm's designers decried human leasing agents as "having too much empathy." Yikes.

How to handle computer pricing

All that said, if you happen to find an apartment that you like that happens to use this kind of software, it's not an immediate dealbreaker. RealPage brags that its efficiencies increase rents overall, but that doesn't automatically mean that the price you get will be inflated.

However, knowing that this kind of thing might happen, here's what you should do if you get a less-than-concrete answer about the rent from the leasing agent:

1. Confirm that they're using computer pricing. First, if the leasing agent has not mentioned the use of computer pricing, ask them if that's why they cannot give you a firm answer about the rent for the unit you want. If so, proceed to Step 2. If not, you might consider not renting there, as there is something weird or underhanded happening, and you can expect other weird or undesirable things to come in the future.

2. Ask for a ballpark range. Don't try to nail down a price right away, as it's foolish to ask when it could change before you're ready to move forward. Instead, try to get a ballpark range of rents or, at the very least, a rough estimate about the lowest-possible price it will be. Note: if the agent won't even give you a hint, consider crossing the property off the list, as you simply don't have enough information to make a decision.

3. Take the time to see other properties. Be sure to get some comparison properties that also meet your needs. Ideally, you can do a fair bit of weighing the benefits and drawbacks of each. However, do not rush to grab the computer-generated price or feel as though you need to sign under duress.

4. Be ready to pull the trigger if you decide to go for it. If you decide that the computer-priced complex is the one you want, head back and apply. At that time, you'll receive a price quote, but don't expect that quote to be good any longer than you are physically in the leasing office. So, be ready to submit your application - assuming that you meet all of the other requirements.

5. Have a backup plan. It's possible that the software will have increased the price of your desired model unit dramatically since you received your rough estimate. So, have a maximum acceptable rent that you're willing to pay AND be willing to walk out the door if the quote exceeds your maximum.

   -----------------------------------------DO NOT BE PRESSURED INTO PAYING MORE THAN YOU CAN. Although some apartments are more beautiful than others, you should never stretch your finances to afford one. Know where you'll head as your second (or third) choice if the first one falls through.