A 100-unit property can bring in more than a million dollars in additional revenue with just a few tweaks, according to some multifamily management pros.
During a panel session at the MFE Conference in Las Vegas on Sept. 10, a team of five experts discussed strategies of how to boost the bottom line of a 100-unit community with seven strategies.
Determining if you’re charging an accurate amount for rent and then raising the rents to meet your value was one of the first places the experts sought to increase money. It’s also where a 100-unit property might gain more than $400,000.
Using revenue management systems is a valuable tool in raising rents, Todd Bowen, of Kettler Management said. However, you can’t just rely on the computer to do all the work.
“We realize that our employees and team members and the people operating the system must be astute and make very good decisions to optimize those rents,” he said. “We can’t just let it go, so we rely on them to study and get out in the marketplace and interact with our competition in addition to getting into the details of what the system is requesting.”
Creating a sense of community came up as an important factor in both improving occupancy and reducing turnover, panelists said.
Stephanie Brock, division president at Riverstone Residential Group, said many of the company’s properties offer a coffee bar featuring Starbucks coffee free of charge for residents. They encourage residents to take advantage of the service and to meet others in the process.
“That creates a sense of community,” she said. “They get that for free and the next thing you know they’ve got that stickiness…It may be simple, but it’s $5 a day.”
If the owner of a 100-unit property can increase economic occupancy by 1 percent, it can help the value by more than $200,000.
Having the opportunity to interact with residents in a non-businesslike manner is important in building a lasting relationship, Mark Segal said. Segal, president and CEO of The Habitat Company, believes taking a lot of the back-office functions off of the on-site staff members allows them to have better interactions with residents.
“So that the people who are onsite, who are the only ones who can have that positive interaction with our residents, are free to do so,” he said. “And so we really make a great effort to try and relieve our onsite team members from administrative burden so that customer service level is happening on a recurring basis. Its every single touch point we have with our residents on a daily basis that makes that difference.”
The additional areas to increase profits included managing payroll, ancillary income, taxes and revising insurance.
Lindsay Machak is an Assistant Editor for Multifamily Executive. Connect with her on Twitter @LMachak.