It’s no secret that apartment property managers/operators have a lot on their plates. In addition to rent collection and tenant screening, they oversee maintenance, manage costs, and work with owners to determine optimal lease rates. On top of that, operators are responsible for understanding the current housing regulations while keeping residents satisfied.
Doing all of the above—and more—relies on accurate information which, in turn, is used for benchmarking purposes. Experts tell ApartmentBuildings.com that such data, combined with the appropriate technology, is essential for ensuring an efficient and profitable property.
Benchmarks Versus Conjecture
Benchmarks are defined as “something that serves as a standard by which others may be measured or judged.”
Delving into the definition further, “benchmarks help us understand not just how a property is performing, but how it compares with the rest of the portfolio and with the broader market,” commented Greg MacDonald, Ballast CEO and Co-Founder.
Metrics generally fall into one of the following categories, with some overlap.
Financial: Cash Flow and Asset Value
Bonaventure’s Head of Asset Management, Barrett Lowell, explained that core finance metrics generally include expense ratios (total operating expenses as a percentage of gross revenue) and per-unit expenses. Other measurements include same-store growth, NOI growth, controllable expenses and economic occupancy, all of which “encompass revenue and performance information,” according to Chris Moltke-Hansen, CFO of Apartment Management Consultants.
Operational: The Nuts and Bolts
The experts said that unit turn costs and work order completion time are among the many data points studied to determine operational efficiency. “One of the most revealing metrics is response time for residential service requests, which reflects staffing levels, communication systems and how well internal workflows are functioning,” added Calynne Oyokokor, senior vice president, Multifamily Rental Division, FirstService Residential.
Parktown Living Senior Vice President Patti Higgins also stressed the importance of maintenance response and completion time statistics, as well as leasing velocity and traffic conversion rates, for benchmarking.
Moltke-Hansen also explained that key performance indicators included employee headcount per unit, insurance costs, capital expenditure per unit, and safety incident rates.
Residential: Keeping Renters Happy
Then there is the data about renter satisfaction. Higgins explained that retention and renewal rates provide such information. Lowell agreed, adding that “online reviews also play a role in assessing operational effectiveness.”
Crunching the Numbers
Operators need to collect data. It’s also essential that operators understand what the data are telling them.
In most cases, data is fed through “property management systems and operational dashboards, allowing ownership to identify trends and address inefficiencies quickly,” said Curtis Holder, director, head of asset management, with Excelsa Properties.
Additional helpful systems include risk management, customer relationships, payroll and market data. “The more frequently data can be refreshed and measured, the more effective and efficient managers can be,” Moltke-Hansen said.
Furthermore, “advanced property management platforms such as Yardi provide real-time financial visibility, operational tracking and detailed reporting,” Higgins said. “This lets ownership and management teams make informed decisions quickly and confidently.”
The Role of AI
Artificial intelligence has been integrated into apartment operations and used to streamline tasks, including scheduling, rent collection reminders and invoice processing.
At the same time, “AI tools can analyze leasing trends, concessions and occupancy to help guide pricing strategies,” Holder said. Another ability involves developing predictive models to help “identify recurring maintenance issues before they become larger capital problems,” Holder added.
AI can help operators get ahead of problems, such as water leaks and HVAC breakdowns, before they escalate into emergencies. “A water leak sensor can alert maintenance staff to a slow drip under a water heater before it develops into a costly flood,” Lowell explained.
Additionally, the technology helps respond to residents’ questions and route service requests. Oyolokor said that such tools can reduce administrative workloads, allowing property managers to better focus on resident service and operations.
“Property teams handle a high volume of service requests, inquiries, and administrative tasks, and digital systems help organize that work so staff can respond more quickly and consistently,” she commented.
Speaking of residents, virtual leasing agents help connect prospects with the property, assisting with inquiries, pre-qualifying leads and scheduling tours. “It significantly improves lead-to-lease conversion rates, while handling three to five times the typical inquiry volume,” Lowell said.
AI is also useful for detecting tenant application fraud, a costly issue for owners and operators. Higgins said that Parktown Living implemented advanced application screening, which has resulted in “a decrease in late payments and evictions and an increase in resident satisfaction.”
The Human Necessity
Moltke-Hansen said that effective property managers continue to vet and test which technologies and AI solutions improve property performance and value before putting them into use. The issue occurs when managers fall short in the handoff between AI and humans. “This can result in a prospective resident going elsewhere,” he said.
Ballast’s MacDonald agreed, explaining that AI bots don’t eliminate the need for on-site teams. “The technology gives the team better information and allows them to operate more proactively,” he commented.
The experts emphasized that AI is a technology tool, rather than a substitute for humans. According to Lowell with Bonaventure: “We leverage the technology to automate transactional work, better inform decisions, and to enable our operations team to focus on what matters most: Property performance and the resident experience.”
An earlier version of this article was published on ApartmentBuildings.com.
The post More than Guesswork: Data and Technology for Multifamily Management Effectiveness appeared first on Connect CRE.
