Finding NOI Growth in a Flat Rent-Growth Market

Q2 2025 delivered a headline no one expected: more than 188,000 units absorbed nationally, the highest second-quarter absorption ever recorded. 

Demand is clearly there, yet despite this surge, national vacancy only ticked down to 4.1%, with far higher rates in Sun Belt metros still digesting an influx of new supply.

At the same time, rent growth has remained flat for nearly two years. August figures show a 0.7% rent increase, the same as in July. While this doesn’t necessarily suggest market weakness, it serves as a reminder that competition, not demand, is the main obstacle.

Here’s the paradox: Absorption is strong, rents are flat, and vacancy is stubborn. NOI is caught in the middle.

That reality is forcing operators to look past broad market averages and into the details that make the difference. NOI growth today isn’t about chasing market rents. Instead, it’s about pulling the quiet levers: smarter concession strategy, earlier renewal offers, and operational investments that keep residents satisfied and renewing.

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Related: What Is NOI? Net Operating Income In Real Estate

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The Competitive Pressure of NOI

NOI is feeling the squeeze in today’s market, not because demand has dried up, but because competition is unlike anything operators have seen in years. A historic wave of new supply is bringing more units to market than at any point in the past five decades.

On top of that, a growing share of “accidental landlords” is quietly adding even more rental inventory. These are homeowners who, reluctant to sell in the current mortgage environment, have chosen to rent out their properties instead. In Sun Belt metros such as Atlanta, Phoenix, Dallas, and Tampa, this dynamic alone has increased available rental stock by more than 20% year-over-year.

The result is a more crowded market. Multifamily operators aren’t just competing with other institutional landlords. They’re also up against single-family rentals and small-scale landlords who offer homes that attract renters with families, pets, or a desire for more space. That diversity of options makes it harder for traditional operators to maintain their pricing power.

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Concessions are Back – But Beware

One way many are fighting for leases is through concessions. Concessions are back at levels we haven’t seen since the 2008 Global Financial Crisis. We’re seeing stabilized multifamily properties offering an average of five weeks of free rent, and even more in some metros.

This isn’t about affordability. Wage growth has outpaced rent growth for over two years. It’s about competition. With more new units being delivered than at any point in nearly 50 years, operators are relying on concessions to capture demand.

However, concessions pose a risk: current residents expecting similar deals upon renewal. If new residents get concessions and the community refuses to match, satisfied residents might leave for competitors, leading to vacancy costs and additional marketing expenses.

The key point is this: when supply is high, NOI growth won’t come from simply raising rents. It will come from careful concession management, early renewal strategies, and service that gives residents a reason to stay even when choices abound.

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The Renewal Advantage

If concessions are a short-term fix, renewals are the long-term advantage. The data shows a striking shift: apartment turnover has fallen, and 55% of renters nationwide are choosing to renew.

Some may be quick to point to high mortgage rates, but turnover was declining well before rates spiked. The drivers run deeper and include:

• Professionalized property management. Operators have stepped up their game by borrowing strategies from the hospitality industry and investing in systems that free on-site staff from repetitive tasks. With automation managing much of the paperwork, teams can spend more time directly engaging with residents, building relationships, solving issues, and creating a sense of community that encourages people to stay.
  
  
• Older renter base. The renter pool is getting older. The median renter age has increased two years from 2024 to 2025. Older renters are also more rooted, anchored by partners, children, or pets, and they tend to move less frequently than their younger counterparts.

• Resident expectations. Today’s residents seek service, convenience, and quick responses. From package delivery lockers to mobile maintenance requests, operators who fulfill these needs see clear improvements in satisfaction. Happy residents are much more likely to renew, which helps lower turnover and supports steady NOI growth.
  
  

The renewal story also centers on economics. A resident who renews spares operators the costs associated with a turn, like cleaning, repainting, and marketing. It also avoids downtime, which operators know can erase months of rent growth, even if the vacancy is short-lived. While concessions might win a lease, they don’t ensure stability. Renewals, on the other hand, produce predictable, steady income.

The opportunity for operators is simple: secure renewals earlier. Some of the most effective teams are now sending renewal offers six months in advance, locking in retention before residents start exploring alternatives. Personalized outreach and service touches help capture renewals in a competitive market.

Renewals also reinforce investor confidence. Lower turnover leads to more stable NOI, and solid retention strategies signal operational strength. In an environment of flat rent growth, each early renewal guarantees revenue and minimizes vacant days. It’s the most dependable NOI driver available today.

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Recommended: How Smarter Workflows Strengthen Multifamily NOI

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Operational Investments that Pay Off

Beyond renewals, NOI growth often depends on how operators allocate their spending at the right time. Three priorities stand out:

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1. Timely OpEx Prevents Bigger CapEx

Many owners cut OpEx first when revenue tightens. They do so thinking that trimming maintenance, upkeep, or service budgets will free up extra capital. On paper, it looks like a win for NOI. In practice, it’s a risk multiplier.

A small leak can lead to the need for a whole new roof. Paint that wears in a few spots might eventually mean a full repaint. Delayed repairs tend to escalate into much larger projects with higher costs. Plus, they create disruption for residents.

Operators who stay disciplined on OpEx, even when budgets are tight, often spend less overall. They also maintain stronger resident satisfaction, which translates into higher renewals and NOI growth.

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2. Amenity ROI That Matters

In a flat-rent market, not every amenity pays back. The question isn’t “What can we add?” but “Which investments will bring tangible benefits in terms of renewal lift or rent growth?”

For some assets, package lockers or upgraded WiFi might matter more than a pool refresh. For others, it’s about unit-level improvements like smart locks or new finishes. The key is using data, such as surveys, renewal trends, and leasing feedback, to distinguish between the must-haves and nice-to-haves.

Remember, amenity spending should be as strategic as any other financial decision.

When operators can present clear data showing which upgrades lead to rent increases or renewal improvements, they can focus on projects that not only boost resident satisfaction but also provide measurable value to investors.

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3. Efficiency Through Technology and Centralization

Efficiency isn’t just about cost control. It’s about freeing onsite staff to do what matters most: serve residents.

By centralizing back-office functions, such as delinquency management and accounting, operators can reduce noise in the leasing office. Pair that with AI-enabled automation, and onsite teams get time back to focus on renewals, service requests, and resident engagement. 

This model creates a virtuous cycle: lower staff burnout, better service, and NOI growth. Ultimately, efficiency means creating an operating framework that delivers lasting value for both residents and investors.

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Related: How Asset Managers Can Improve NOI With AI-Driven Pricing Models

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How to Achieve NOI Growth with Rentana

Flat rent growth doesn’t have to mean flat NOI. But it does mean operators need to sharpen their focus on the quiet levers of performance:

• Smarter concession monitoring to prevent renewal surprises.
• Earlier renewal strategies to capitalize on historically low turnover.
• Operational efficiency and timely investments that reduce costs, improve satisfaction, and prevent CapEx surprises.
  
  

The national story is straightforward: absorption is strong and demand is steady, but supply is heavy, keeping rent growth muted. Operators can’t change the supply picture, but they can change how they respond.

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That’s where Rentana comes in.

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Built specifically for multifamily, Rentana unites operational, leasing, and financial data into a single real-time view. Its AI not only shows what has happened but also predicts what’s about to happen, so operators can:

• Capture missed revenue before it disappears.
• Optimize lease-ups without guesswork.
• Strategically approach renewal offers.
• Answer investor questions with confidence, backed by live data.

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For owners and operators, Rentana delivers the speed, accuracy, and insight that turn AI from a buzzword into a measurable advantage for NOI growth.

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