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Create a 2 page essay paper that discusses Assignment: You recently accepted the position of resident manager of a 20-unit apartment building near the campus of a major university. The building is app
Create a 2 page essay paper that discusses Assignment: You recently accepted the position of resident manager of a 20-unit apartment building near the campus of a major university. The building is approximately 20 years old, and, although well located relative to the university, it has.
In the given case, the available apartments are old, worn and devoid of any modern facilities. The resident manager’s survey reveals that people have already been paying more for newer complexes that provide facilities of microwaves, swimming pool, work-up units, dishwaters, ceiling fans and such utilities. This implies that market is for modern apartments and occupiers are ready to pay for that.
Being in close proximity to university campus, the resident manager’s apartments do provide situational advantage and therefore it may appear that most of these apartments should remain occupied. however, that is not the case. These apartments will certainly be preferred by those who do not have their own transports and have to visit university campus area frequently for attending classes. The higher vacancy rates reveal that a class of people that prefers apartments in proximity to campus is not much in proportion. On the contrary, the premium segment needing apartments with all amenities is much larger. It is important to note that people wants apartment with modern amenities even by paying higher rentals as mentioned in this case.
In view of the above perspective, it appears that even if the resident manager reduces its rental charges, there will not be significant improvement in occupancy rates. Drastic reduction in rentals could improve occupancy but that will not suffice their purpose. After all, the resident manager is interested in maximizing the absolute revenue on monthly and yearly basis for a 20-unit apartment and not merely occupancy rates. Some judgment of price elasticity may help here in decision making process. For example, if demand of apartment is price inelastic then any reduction in rental will not generate any significant demand of apartment as people are not looking at price but the basic amenities (Riley, 2012).
