Expenses continue to grow at above-trend levels

Woodland Hills, CA— April 3, 2024—Expenses for multifamily properties, particularly property insurance, have been increasing rapidly in recent years. ​

The rise in expenses, particularly driven by property insurance, marketing, administrative, and repairs and maintenance costs, led to an overall increase of 7.1% per multifamily unit nationally as of January 2024, according to a new report from Yardi Matrix.

Property insurance costs per unit rose an average of 27.7% in the year ending January 2024, and have surged 129% nationally since 2018 to an average of $636 per unit. ​Insurance costs have risen rapidly in most parts of the country, particularly in the Southeast and other areas experiencing the impact of weather-related damages. ​This increase in expenses poses a challenge for property owners, as income growth is likely to be weak in the next 12-24 months.

Among the top 30 metros, markets in Florida such as Tampa, Orlando, and Miami experienced the highest expense growth, primarily due to significant increases in property insurance. Other top metros included Las Vegas, Atlanta, the Inland Empire, Charlotte, Portland, Los Angeles, and Denver.

A Yardi Matrix data chart showing the growth in multifamily total expenses from 2018 through 2023

Regionally, the Southeast recorded the largest increase in costs at 8.8%, driven by insurance and general inflation. Expenses rose by 7.3% in the West, 6.4% in the Midwest, 6.0% in the Southwest, and 4.7% in the Northeast.

Expenses varied significantly across expense types and metro areas. Property insurance saw the highest average increase at 27.7%, followed by marketing and advertising (12.3%), administration (9.6%), and repairs and maintenance (8.8%).

Overall, the data underscores the widespread impact of rising expenses and weak rent growth in the multifamily property sector. Improving operating efficiency through streamlining processes and adopting new technologies is crucial for property owners in the years ahead.

View/Download Report (PDF): Matrix Research Bulletin-Multifamily Expenses-March 2024
Yardi Matrix
Published: April 03, 2024

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