When multifamily residential leaders start discussing centralization, it can strike fear in employees. While it often means cutting costs and improving operational efficiencies, sometimes it means cutting personnel. It’s not about reductions. In fact, the one word that describes the goal of centralization is productivity.
Owners and property managers deal with external and internal forces. While they cannot control many of these forces, they can control how they run multifamily residential operations. Centralization benefits property management companies of all sizes. Centralization optimizes a multifamily residential property’s technologies and resources to help reduce employee workload and enhance customer experiences.
The old multifamily residential property management staffing model no longer works. Here are the reasons why.
- Residents may spend more time in their homes as the pandemic led to a growing number of companies adopting a hybrid model. Multifamily residential properties need to adapt to accommodate hybrid and remote worker requirements.
- There is an increased need to be able to conduct business online. For the past few years, companies have had to undergo digital transformations to allow customers to complete their tasks online. For example, shopping for new vehicles has completely changed. Many customers have been able to purchase new vehicles without going to the automotive dealership. In the same way, residents may want to be able to complete all their residential tasks online. This includes paying rent, requesting maintenance, ordering services, and communicating with the property management team.
- The labor market has changed to the point that multifamily residential businesses need to be intentional about retaining employees. There is data that shows a connection between employee turnover and resident turnover. The higher the employee turnover, the higher the resident turnover.
In short, centralization can help multifamily residential properties transform their business. Centralization is not simply adding artificial intelligence and automating routine and repetitive tasks. Centralization integrates major functions through technology as well as people and processes. It means getting all three to jive together. If you work with third parties, they need to be included in the centralization.
Centralization Trend
According to 20 for 20 research, centralization has been a large component of property management. There has not been much work done on centralizing the leasing and maintenance functions. Based on the interviews, REITs have done this for a long time. However, they’re missing out on opportunities that come with centralizing leasing and maintenance.
Before working toward the centralization of leasing and maintenance, it’s important to understand the what and how. The data from 20 for 20 is important because it’s anonymous and involves interviews with senior executives from leading companies in the multifamily residential industry. The research explains the trends, what they did, and why they did it.
While the industry can learn from the leaders, it’s important to know that what works for one multifamily residential property management company does not necessarily work for another. Some companies have greater opportunities for centralization than others. One takeaway is not to centralize for the sake of centralizing.
What’s interesting is the 20 for 20 in 2023 shows leasing had the highest priority for centralization out of the three functions. This makes sense because leasing plays a big role in revenue performance.
Yet, property administration has the highest rate of implementation. Leasing has the highest “planning” to implement. A Multifamily Executive article by Dom Beveridge shows only three companies are making strides in implementing centralization for the leasing function.
Based on this data, why are multifamily residential companies focusing on centralizing property administration instead of leasing? The article explains why. For one thing, property administration tasks are easier to centralize in a shared service environment. This is the case for many industries. Additionally, the research has found that companies with the greatest successes in centralization concentrate more on people rather than technology.
The other reason could be that after moving property administration off-site, management discovers that is what they should have done all along for those roles. Now, companies are working to move as many of the admin functions off-site.
As a result, employees can redirect their focus to more important tasks related to service delivery and sales. Here’s a good example of how some are benefiting from this. As you know, it costs more to find new residents than to hold on to the ones you have.
That’s why resident retention is a crucial part of property management success. In fact, some multifamily residential property management companies have added a role where the individual’s main job is to create great resident experiences and deliver excellent customer support. They spend most of their day ensuring the property addresses residents’ needs and concerns.
This lets the resident experience manager concentrate on efficiently solving problems and complaints with a smile. This small change can have a huge impact on whether residents stay or go.
Where to Start with Multifamily Residential Centralization
“If there’s one piece of advice for operators considering centralizing the leasing model, it would be to start not with leasing but with property admin,” writes Dom Beveridge. “There is less friction in moving these roles off-site than moving a function like leasing that relies on personal contact. And an operator that figures out how to centralize admin is more likely to succeed in centralizing more complex functions. This year’s evidence indicates that this is the preferred route for an increasing number of successful companies.”
Since you’re working toward a digital transformation, it’s a perfect time to review your current vendor contracts. Look at the services they provide and how long the contract will last. You may be able to consolidate some of the services or switch to a different vendor who might have more to offer.
It’s possible you can consolidate multiple multifamily residential services into one. In doing this, you can gain cost savings, simplify management oversight, and cut complexity. While you might not be able to find a single vendor who can do it all, you will most likely be able to integrate the big components of leasing and proper administration.
One function under property administration that you may want to offload is integrated security. There are vendors that can manage security for your properties without being onsite. They can take care of the video cameras, remote monitoring, access control systems, and other security functions. An integrated security solution can combine all of these into a centralized one. It helps increase the efficiency of security while saving on costs.
For example, multifamily residential properties that offer keyless entry with an access control system take access management off employees’ plates. This is because residents can manage their own access as well as those for their visitors or services. There’s a technology that allows residents to issue a temporary code to visitors that only works while they’re on the property. They can create a unique code for services, such as cleaning and pet care.
When you work with a security vendor like Stealth Monitoring, you can potentially see a return on investment within months. You’ll be able to delegate many staff functions to an external company, so employees can spend more time doing what they do best and less on things they don’t do well.
How Centralized Security Helps Multifamily Residential Companies
The centralization of security makes it possible for security to be managed by one vendor. It’s more powerful when the security is integrated because it helps simplify the process while providing more functionality. For instance, multifamily residential properties often opt for video surveillance, remote monitoring, and an access control system.
The combination of these three security components means video recordings will contain a time stamp courtesy of the access control system. This helps streamline video recording searches and tracking activities.
Live video monitoring turns video surveillance into a proactive security system. Security cameras without the monitoring component are at risk for liability issues. It also turns the cameras into a reactive security system. Monitoring turns cameras into a proactive tool when it includes both trained human monitoring operators and video analytics. They’re often able to catch something before damage or a crime occurs.
This centralized integrated security system can do more than help protect the property, residents, and employees. It can also greatly reduce the stress of managing package delivery. Even though the COVID emergency has ended, there are more packages being delivered than ever as more businesses started offering online purchases. Package management comes to a head during the holiday season.
According to The New York Times, property managers have complained about deliveries as they’ve become overwhelming for the staff to manage. When you outsource package management to a security vendor, employees won’t have to deal with packages.
Multifamily residential owners and property managers have a responsibility to keep the property safe for residents, employees, visitors, and vendors. Video surveillance with remote monitoring and access control system technology can do that. Plus, it can be more affordable than you think. Because it takes some of the onus off onsite staff, it also helps with employee retention. In short, it can boost your NOI.
If you don’t know what you need in a centralized security solution, use this list of questions to ask a security company when you interview video surveillance companies. In selecting Stealth Monitoring as your security partner, you’ll work with security professionals with a wealth of experience in protecting multifamily residential buildings.
Interested in learning more about centralized multifamily residential security? Check out the Complete Guide to Securing Your Multifamily Residential Building. To learn more, contact us.
Texas Private Security License Number: B14187
California Alarm Operator License Number: ACO7876
Florida Alarm System Contractor I License Number: EF20001598
Tennessee Alarm Contracting Company License Number: 2294
Virginia Private Security Services Business License Number: 11-19499
Alabama Electronic Security License # 002116
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