A recently released survey has found there have been some seismic shifts in the multifamily residential property manager priorities. Many of the respondents say inflation is largely responsible for the changes.
The National Apartment Association has released its 2023 Property Management Industry Pulse report that looks at the top industry challenges. To create this report, NAA surveyed more than 2,000 multifamily residential industry professionals. About one-quarter of the respondents are in leadership roles while the rest are part of the onsite staff.
In 2021, the biggest challenges were the high demand for apartments and rent growth. Considering the high demand and rent increases, it’s not hard to see what the biggest challenge was in 2021. Almost three-quarters of the respondents identified human resources, staffing, and recruitment as the most challenging problems they faced.
Considering apartment communities were in demand, property management needed more staff to support the growth. The second challenge was operational efficiencies and the third was maximizing revenue and profits in 2021.
All that said, what are today’s biggest challenges in multifamily residential? More than three-quarters of the respondents have indicated the No. 1 challenge is increasing operational efficiencies.
The survey reveals the other challenges include dealing with the economic climate, complying with new regulations, boosting resident satisfaction, and implementing new technologies. Here’s a closer look at the challenges.
Increase Operational Efficiencies
NAA is not surprised that operational efficiencies were the No. 1 challenge for this year. More specifically, respondents needed to reduce costs. Other operational efficiency challenges include identifying high-quality suppliers, tracking projects and suppliers more effectively, and relieving teams of labor-intensive processes.
Although inflation has somewhat stabilized in the last few months, the industry continues to deal with higher costs for multifamily insurance, property taxes, capital, and salaries. Insurance and property taxes are mounting with no signs of slowing down. Despite this, apartment property managers and owners continue to deal with escalating costs. Also increasing are the costs of capital and wages.
Survey participants have indicated they’re working to build strong partnerships with suppliers. They consider them part of the team, which helps maximize value and quality. To streamline operations, respondents are working to elevate communication among stakeholders.
Outcomes of Improving Operational Efficiencies
Furthermore, improving operational efficiencies goes a long way toward improving the bottom line and resident satisfaction. Here are the impacts of addressing operational efficiencies.
Cost optimization
Operational efficiencies directly correlate with cost savings. By identifying and eliminating inefficiencies in processes, property managers can reduce operational expenses, enhancing the financial viability of the property.
Resident experience
Streamlined operations contribute to a positive resident experience. Swift response times to maintenance requests, efficient communication, and seamless administrative processes all contribute to resident satisfaction. Happy residents are more likely to stay longer, which prevents turnover costs.
Time management
Efficient operations allow property managers to focus on strategic aspects of property management rather than being bogged down by routine tasks. This allows for proactive planning, quicker issue resolution, and strategic decision-making.
Compliance and risk mitigation
Real estate is subject to numerous regulations. Efficient operations can help ensure compliance with legal requirements. This reduces the risk of penalties or legal issues. It also contributes to better risk management and the property’s long-term stability.
Technology integration
Embracing technology is key to improving operational efficiencies. Property management software, for instance, automates arduous tasks such as rent collection, maintenance scheduling, and lease renewals. Automating these helps reduce human errors and speed up operations.
Strategies to Improve Operational Efficiencies
Leaders can apply these strategies to help enhance operational efficiencies.
Invest in technology
To reduce costs, multifamily residential managers are turning to technology like property management software. Managers want to improve internal systems and increase data-driven recommendations to help leaders make better decisions. It’s their hope that technology can automate and reduce some of the employees’ routine tasks and tedious processes. Data analytics can help inform decision-making.
Hold employee training
Technology alone cannot impact efficiencies. People are a large part of this. Therefore, well-trained staff can do their tasks more efficiently. Rather than having them figure out technology on their own, training can get them up to speed and maximize their use of technology. Moreover, regular training keeps employees up-to-date with industry best practices and technology.
Conduct regular process audits
Consistent reviews of operational processes help identify bottlenecks and inefficiencies. Revising these processes to be more efficient could avoid the bottlenecks. When residents aren’t kept waiting due to poor processes, they’ll be happier and more likely to stay longer.
Improve energy efficiency
Implementing energy-efficient practices not only aligns with sustainability goals but also reduces utility costs. Installing smart building technologies can contribute to cost savings and a positive environmental impact. More and more stakeholders expect companies to focus on environmental, social, and governance (ESG). Implementing energy-efficiency technology can contribute to ESG goals.
Use communication channels consistently
Streamlining communication between property managers, staff, and residents ensures that everyone has access to information. To improve communication, property managers can use apartment management software and communication platforms to deliver regular updates. It’s essential that information be distributed in multiple ways as residents have different preferences for how they access it.
Manage supplier relationships
Establishing strong relationships with vendors and contractors helps make sure vendors deliver cost-effective solutions on time. Property managers could consistently review vendor performance to verify they continue to provide high-quality services.
Refining operational efficiencies is pivotal for apartment managers and owners because it positively affects financial performance, resident satisfaction, and overall property management effectiveness. By adopting technology, tweaking processes, and investing in employee training, property managers can position their properties for long-term success and maximum NOI. Not to mention, building centralized relationships with national vendors can help achieve stronger partnerships to leverage discounts.
Maximize Revenue and Profits
Inflation has been eating into revenue and profits. Thus, apartment community managers have been focused on dealing with rising inflation because it’s the top challenge for boosting revenue. Following behind are increasing occupancy rates and retaining current residents. Some leaders stated they’re prioritizing maintaining occupancy rates over rent growth.
A way to boost the bottom line is to review all supplier contracts. There may be opportunities for renegotiating the contracts. If this doesn’t work out, then it may be time to look for a new vendor who can meet the apartment community’s requirements.
One thing that cannot be sacrificed in the efforts to cut costs to increase profits is the residential experience. With winter being the worst time for move-ins. As a result, many multifamily residential properties are offering more concessions, such as free rent for a time or no increases on lease trade-outs.
Enhance HR, Staffing, and Recruitment
Human resources, staffing, and recruitment was the top priority in 2021 and now it has fallen into third place. Its biggest challenges are attracting new employees, training them, and limiting turnover. Part of the cause is a competitive labor market, especially when it comes to finding qualified maintenance technicians. Some of the leaders have commented in the survey explaining they’re struggling to bring in qualified candidates.
Leaders say they’re focusing on creating a positive workplace culture to counter recruitment and retention challenges. Many respondents report relying on salary increases and loyalty bonuses as a means to retain valued employees.
“Inflation has spoken loud and clear in this year’s survey, touching many of the industry’s most pressing challenges,” said NAA Vice President of Research Paula Munger in the press release. “This doesn’t mean that the industry’s labor woes have disappeared, but it is a testament to the impacts of a high-interest rate and high inflationary environment.”
Security Technology Helps Multifamily Residential Communities
Apartment communities can centralize security that takes the onus of security off employees. Working with a vendor that specializes in security technology can optimize the return on investment and let the supplier manage it. Centralized security simplifies the security management process and delivers more functionality.
An example of this is investing in video surveillance, remote monitoring, and an access control system. Combining these security components helps ensure video recordings will contain a time stamp thanks to the access control system. This integration helps streamline the process of searching through hours of video recordings.
Security cameras without monitoring don’t always deter crime and they’re at risk for liability issues. Video cameras without monitoring are a reactive security system. The remote monitoring part of video surveillance is what makes it a proactive security system. For the most efficient monitoring, it needs to combine technology like video analytics and human intelligence, in the form of trained monitoring operators. Together, they can help spot a problem before damage happens or a crime occurs.
Multifamily residential community managers and owners have a responsibility to keep the property safe for residents, employees, suppliers, and visitors. Video surveillance with remote monitoring and access control system technology can do that.
Remote video monitoring is often more affordable than other security solutions. Implementing this integrated security solution lets employees focus on what they do best, like overseeing the resident experience. As a result, it can help:
- Reduce staff time reviewing incidents and assembling evidence for police
- Minimize insurance claims and enhance the capacity to exercise subrogation rights against renter’s insurance policies
- Reduce crime to achieve a demonstrable effect on resident retention and improve rent and renewal rates
- Reduce the amount of money spent on marketing for new leases
- Achieve better survey and online review results
To help you find the right centralized security solution, use this list of questions to ask a security company. In selecting Stealth Monitoring as your security partner, you’ll work with security professionals with a wealth of experience in protecting apartment communities of all sizes across North America.
To learn more about centralized multifamily residential security, check out the Complete Guide to Securing Your Multifamily Residential Building. Feel free to contact us with your questions.
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