Together NAA and IREM have partnered to produce a new benchmarking tool, Income/Expense IQ. The 2021 Income/Expense IQ, which covers 2021 financials, is now available for purchase. The data in the executive summary report (see p. 19) unveiled the strength of the apartment industry’s performance in 2021. 

1. Average rents increased by 4.6 percentage points in 2021. Additionally, other income, such as amenities and pet fees, also increased by 2.1 percentage points. Parking fees, which are included in gross rents, decreased slightly. 
2. Loss-to-lease increased 2.9 percentage points due to market rents experiencing significant growth because of high demand and lack of apartment supply in 2021. 
3. Losses to vacancy, concessions and bad debt all declined as a result of healthy market conditions and economic growth, including notable income gains. 
4. Operating expenses declined by 1.8 percentage points, despite inflation, which began in earnest in June 2021. 
5. Repairs and maintenance decreased by 1.7 percentage points. Appliance, paint and cleaning supplies prices increased, while janitorial services, elevator repair and maintenance, and snow removal prices all fell. 
6. Turnover costs also affected the decline in total operating expenses by 1.2 percentage points due to high renewal rates. 
7. Payroll expenses declined despite historical wage growth in the U.S. Factors such as the number of jobs, how long it took to fill positions, and technology could all have an impact of reduced payroll expenses. 
8. Utility costs increased the most, by 1.8 percentage points. This was mostly because of the cost of heating fuel, which increased by 1.4 percentage points. 
9. Property taxes and insurance were also on the rise in 2021, increasing a total of 0.9 percentage points. 
10. Net operating income (NOI) increased by 5.4 percentage points. This was due to the record-breaking performance of apartments across all indicators in 2021. The Sun Belt, where there was a lot of in-migration, strong household formations, and excellent job growth, did especially well. 

For more information on the article, contact Leah Cuffy, NAA Senior Research Analyst, at [email protected].