Alberta’s economy is recovering, and your vacancy rate is still on the high side. What gives? Shouldn’t it be lowering as the economy gets better?
What you probably don’t want to hear is that your vacancy rate may be beyond your control no matter how hard you try to remedy it.
Even when you attempt to find prospective tenants, the universe may decide that's just not going to happen. Tenants can be picky and finicky and are affected by things you can't control that influence their actions. No matter how hard you try to attract them, sometimes it just doesn't work.
High Apartment Vacancy Rate Causes
There are things you can control and things you can’t. One of the reasons you may still have a high vacancy rate is because of the condition of our province. It has nothing to do with your building, advertising efforts, or the city.
One of our first causes is that many people are still lacking a job or have had to find one with a lower salary/wage. With that comes a new reality. Money isn't being flung around carelessly anymore. Instead, people are pinching their pennies, saving where they can, and trying to find deals.
The reality of it is that your units may not be align with tight budgets. If you think your units may be priced a bit too high, see if they’re comparable to your competitors and go from there. You’ll also need to determine how low you can go. If you go too low, you won’t be profitable. You need to find the perfect medium to make both you and your tenants happy.
People Move all the Time
People are constantly on the move, moving within cities, provinces, and countries. That's the other reason your vacancy rate could still be high—Albertans are becoming BC and Saskatchewan residents. According to new Statistics Canada numbers, more people left Alberta in the second quarter of 2017 than moved into the province.
Now don't get us wrong; Alberta is still growing. However, it's just not as much as we were before when things were going great. Over the last quarter of the year, the province lost around 5,000 residents to our surrounding neighbours.
Overall, Alberta's migration numbers are still high; many new people call Alberta home. However, we have more people leaving the province than coming in. Alberta had almost 30,000 people come into the province during the last quarter, but 35,000 left and didn't look back. That's roughly 1.5 percent of the population in flux, which doesn't include intra-provincial moving within the province.
Moving out of the province could be age-related, too. Albertans, especially older ones, are moving to B.C as they enter their golden years. Despite all the numbers, Alberta's overall population continues to grow due to the younger population starting families.
For real estate investors, this reality means your tenant pool becomes significantly smaller. You have less prospective tenants to choose from, and of those, only a portion of them will be able to afford your units. If vacancy is plaguing your apartment, you may just have to wait it out if your efforts continue to yield no improvement.