Sarah SullivanFounder and CEO of SuGo Capital

How to understand occupancy rate in an apartment investment

Name: How to understand occupancy rate in an apartment investment
Uploaded: 2024-02-20T19:04:53+00:00
Duration: 39 s
Channel: Sarah Sullivan
Description: Sarah Sullivan (YouTube) explains how to interpret occupancy rate for apartment investments. She cites 71% occupancy as a healthy benchmark — meaning a…

20 Feb 2024 · 1 min

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0:39

Sarah Sullivan (YouTube) explains how to interpret occupancy rate for apartment investments. She cites 71% occupancy as a healthy benchmark — meaning a property could fall to 71% occupancy and still avoid foreclosure (though not necessarily make a profit). She warns that break-even occupancies of ~80–85% are risky given that some U.S. markets have occupancy in the mid-to-low 80s right now, so investors should ask for each deal what the break-even occupancy is.

Questions this video answers

71%.

Around 80–85%.

Mid to low 80s in several U.S. markets.

Chapters

Love seeing this number and asking this number for every deal that we go into. So 71%. What does that mean? That means that we can go down on this property to 71% occupancy and still be okay. It doesn't mean we're going to have a profit, but we won't be in foreclosure. So that's a really important number to look at for each property. And if you're looking to make an investment and you ask what the break even occupancy is, and it's 80, 85. For me, that's getting dangerously high because occupancy has actually been getting down in the mid to low 80s in several markets around the US right now. So you want to make sure you pay attention to that. And 71 is really healthy. So I like that.