Have you tried to buy a refrigerator or washer/dryer lately? Have you gone furniture shopping? You find one you like in the store or online, only to soon realize almost nothing is actually in stock. And if you want something now, your options are extremely limited.
These disruptions have widespread impacts, including on apartment property managers. In apartment operations, the last thing you want is to have a vacant unit you can’t lease because you can’t replace a broken refrigerator or can’t find the right paint for touch-ups. And in the heat of summer, your residents want to use your pool, so they expect you to figure out how to keep it clean even if chlorine is hard to find.
Here are the top seven supply chain disruptions that apartment managers face today. We’ll also share workarounds for each one to ensure minimal impact to operations—and the bottom line.
1. Appliances
You’ve probably heard the horror stories or experienced it yourself. Kitchen and laundry appliances are tough to find. Some have reported waiting many months just to receive a refrigerator. COVID-19 impacted manufacturers first with shutdowns, then with an unexpected surge of orders from home remodelers and builders. Add to that the shipping delays from overseas, and it’s a mess. It may be 2022 before we get back to normal.
How do apartment managers work around it?
1) Keep close watch of inventory levels—and order extras when you can. Many property managers use an inventory module in their facilities technology platforms to track available stock. It’s always critical to track inventory, and now more than ever.
2) Borrow from vacant units. Some managers consider it a cardinal rule not to rob from one vacant unit to fill another vacant unit. But desperate times call for desperate measures. Just make sure you track those moves.
3) Be flexible on appliance models and colors. In normal times, best practice is to limit SKUs. But that’s hard to do during a shortage, particularly as manufacturers prioritize their top-selling models.
2. Chlorine for Pools
It’s pool season, and that means pool maintenance is nonnegotiable. But it also means chlorine is in super high demand—particularly after a massive surge in new backyard pool construction over the last year as Americans spent more time than ever at home. Just as demand rose, supply of Trichlor, a popular chlorine, has dropped due to hurricane damage last summer at a major manufacturing plant in Louisiana.
How do apartment managers work around it?
1) Consider alternative pool cleaners, including Cal Hypo tablets, liquid chlorine (sodium hypochlorite), or salt water chlorine generations (SWCGs).
2) Note that health codes vary by region. Check your local pool and spa health codes regulating apartment communities in your area.
3. Paint
Paint is a staple of the unit turn. But even paint colors are getting more limited due to supply issues at the same time demand surged from home remodelers and builders. Supply shortages trace to a perfect storm of factors from shortages of raw materials used to manufacture paints to the Texas winter freeze to freight shipping delays. The shortages are forcing some property managers to consider switching paints. But that’s never ideal.
How do apartment managers work around it?
1) Break (another) cardinal rule of property management by switching paint when you can’t find your SKU in stock. The alternative—not painting walls damaged by prior resident—is usually a non-starter. Juggling more SKUs is a pain, so make sure you track which units have different colors, so you can eventually prepare to go back to your primary SKU when supplies return.
2) Delay painting projects for common areas and exteriors. Exterior painting is more popular in the summer due to warmer weather, but if it’s not critical, you might hold off.
4. Labor
Labor shortages are biting apartment property management companies at every level. On the vendor and supplier side, labor shortages often delay projects. But labor shortages are also felt on-site—particularly for maintenance technicians and experienced leasing agents. Job openings outnumber qualified job candidates for many roles, and, meanwhile, your competitors are trying to hire away your team members, so salaries are going up. RealPage found that payroll costs actually held flat year over year in the first quarter 2021, reflecting that property managers are getting more efficient, either because of unfilled jobs or because of new technologies.
How do apartment managers work around it?
1) Shift back-office functions away from your on-site team. Property managers were already going this direction pre-pandemic, but, now more than ever, it’s paramount to ensure your on-site team can focus on the two roles that move the bottom line: leasing units and serving residents. Today’s technology makes it far more efficient to handle billing, procurement, accounting, IT, payments, and other services off-site.
2) Support your on-site team with leasing and resident engagement technologies. If your leasing operation depends on office hours of your staff, you’re putting stop signs in the path of your prospective residents. Seamless virtual leasing powers you to do more with less—and without the stop signs or layovers.
3) Focus on employee retention and training. You want to keep your experienced team members, and that means ensuring salaries grow with the market. And you want on-demand training for new hires to free up your veteran staff to keep the train moving.
4) Think outside the box to fill maintenance roles. When it’s difficult to find qualified people for the job, leverage a vendor marketplace solution to outsource maintenance tickets and unit turns to qualified vendors. Also consider partnering with local technical colleges and trade schools to find skilled labor.
5. Lumber
No supply chain disruption has made more headlines than lumber, so we won’t rehash all the backstory. The good news is that for apartment operators, high lumber prices aren’t impacting you unless you’re undergoing renovations or building new apartments. And further good news, lumber prices more recently have begun to decline some after rapid escalation over last year.
How do apartment managers work around it?
1) If you can wait until next year, wait until next year. There are no guarantees, but this probably isn’t the time to push non-urgent renovations unless the property owner has committed a certain value-add timeline to investors.
2) Ensure everyone involved has proper expectations. The project may cost more, and it may take longer than planned. You want to make sure everyone from the on-site teams and the residents (if applicable) to the investors and the contractors are all on the same page.
6. HVAC and Water Heaters
Here we go again: Supply going down while demand going up. It’s true of HVAC systems and water heaters, as well. There’s a shortage of microchips used in the newest HVAC products. And manufacturers are still catching up after a run on after-market condensing units early in the pandemic. Facility closures due to COVID issues last year further contributed to delays. As a result, prices are going way up.
How do apartment managers work around it?
1) Keep safety stock on hand in case of failure. Long leads times and no inventory means it won’t be a quick fix.
2) As always, try to repair before replacing.
3) When you need to find a product fast, use solutions like Vendor Marketplace to find approved vendors beyond those you’ve worked with in the past. It might take a few phone calls to find your product in stock.
7. Roofing
At this point, you know the story: Supply shortages fueled by manufacturing and shipping issues. Plus, demand for shingles and other roofing materials jumped due to increases in both storm damage and in construction. Unfortunately, roofing is another nonnegotiable item. When it’s damaged, you have to get it fixed.
How do apartment managers work around it?
1) Start early. If you think you might need a new roof, contact your roofer now.
2) Prepare to wait longer and pay more. In some cases, it can take six to eight weeks to get roofing materials delivered.
3) Be flexible on colors. Manufacturers are focusing on their most popular SKUs, and that might mean your first choice is out of stock.
RealPage’s Sara Jones, Jeffrey Hanrahan, and Jennifer Lester contributed to this article.
