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Multifamily real estate management is a rapidly growing industry. To take advantage of favorable market conditions, it is imperative to develop a competitive edge. An edge over rivals can manifest in many different forms. Some multifamily real estate managers try to create a truly welcoming community by being responsive to tenant input. Others look to new technologies in order to make their lives and the lives of their tenants easier. There are many different roads to get to point where you have a competitive advantage in multifamily real estate management. Here are some of the ways industry leaders are building an edge in the next 12 months.
Analyze Your Process/Plug Your Leaks
There is excellent value in self-reflection. Many professionals believe they have reached maximum efficiency in their property management process. Perfection is not possible in an imperfect world, and there is always room to improve. The methods used by most high-functioning managers are continually being tweaked and improved.
A common multifamily real estate management leak is failing to study the tenant’s experience from move in to their final move-out day. The focus should be on making the tenant’s experience as positive as possible throughout their lease term. Elizabeth Carlson, President and Chief Operating Officer, Beztak Properties, describes her company’s forward facing process: “To remain competitive in the industry today, you must offer your renter a great product combined with a great experience. Renters are demanding flexibility and convenience. At Betzak we offer 24-hour customer service and live chat. We also offer a text for maintenance service.”
The services she describes have become standard in many multifamily developments. However- she goes on: “Our lease terms are flexible at 1-18 months at most of our communities. You can choose your apartment online, apply online, and use your renter’s kiosk to obtain renters insurance or finalize your move in. Services such as individual package lockers, dog walking services, concierge services, Zipcars, free bikes, scooters available to check out, and electric charging stations are useful and fun. These are great amenities with low cost to the owner.”
Find Ways to Lower Maintenance Costs
Variable maintenance costs can punch a surprisingly large hole in your operating budget. An excellent way to mitigate these costs is to make investments in staff training. Steve Jankowski, the President of Atlanta-based property management, Jankowski & Associates, explains:
“A solid preventative maintenance program extends the life of major mechanical machinery,” Jankowski says. There’s also a big payoff if you “invest in the equipment to perform maintenance in-house, such as augers and pressure washers, rather than using outside vendors.”
Training investments can pay off immediately. Improving the training of your existing employees will not raise your long-term fixed costs, but can instantly lower your overhead. A good example would be training maintenance workers to prep apartments for showing/leasing. Instead of paying an expensive outside service, you leverage your existing employee to have the same task completed for less money.
Study Your Local Laws
It is imperative that you develop a rigorous understanding of the local laws and regulations that govern multifamily properties. Many cities regulate properties through rental ordinances. These laws can be onerous and a pain to deal with for rental managers and landlords alike. What most managers overlook is the ability to leverage these regulations to gain a competitive advantage. Many managers view rules as merely a hurdle to be overcome, rather than an opportunity in disguise.
The most regulated areas in the multifamily rental property space tend to have those regulations because they are necessary. Many city councils target college neighborhoods for a few different reasons. These zones tend to have lots of young people, which can drive crime, noise complaints, speeding tickets, etc.
Steve Moore, Owner of Villa Serene Properties in Houston, explains how he was able to reduce incidences of crime on his properties: “Most core Greenspoint apartments changed from institutional ownership to hands on ownership and the result has been a reduction of crime to where Greenspoint is approaching Houston average levels.” The value of hands on management cannot be understated, and having insight into your local laws and relationships with city government can prove invaluable for increasing average the average rent per unit and finding quality tenants.
Update Your Social Media Strategy
The best way to connect with a modern renter is through their digital devices. Finding tenants using a well-deployed social media strategy is an integral part of the contemporary rental process. There are many different social networks, apps, and online communities, with many more coming into existence every day. Dawn Waye, the President at City Gate Group in Dallas, TX, explains her approach to online marketing: “Social Media, social media, social media! We use Facebook Ads as a paid option. Free services like Google reviews also help get our name out there.”
Avoid Red Tape
Jody L. Marquez, the President of Implicity Management in San Antonio, TX adheres to a strict overhead reduction strategy. She explains, “We are boutique management in that we are a very flat-lined company; not a lot of red tape to get clients objectives/goals achieved.” Her method also included a focus on pure management, rather than ownership: “True 3rd Party Fee Management – we do not own any assets – our attention is 100% on our clients.” Avoiding red tape and structures that limit your organization’s productivity is key to succeeding in the multifamily real estate management world.
Adopt New Technologies
Being apprised of new technological innovations is another important strategy for getting an edge in the multifamily property business. Marquez describes Implicity’s approach to tech: “Our technology is in line with the present if not surpassing it.” New technologies take different forms. Some property managers use tech to attract tenants, for example, Star Metro Management in Portland, OR, offers free wifi internet access in most of their properties.
Yat-Pang Au, CEO and Founder of San Francisco’s largest Multifamily operator, Veritas Investments, looks to “PropTech” as a problem-solver and a differentiator: “PropTech is helping on the resident side along with the owner and manager side, and it’s everywhere, from leasing to amenities to construction to regulatory and financial services.”
Veritas has joined up with Silicon Valley technology companies like Pillow, Rentlytics and Latch to meet the demand of tomorrow’s residents. Yat-Pang Au shares how the company benefits from it’s partnership with PropTech company Pillow: “Through the Pillow partnership, Airbnb rentals are enabled for residents. Not only is this a great way to earn income, but it’s a way to safely monitor home-sharing in buildings by being a part of a sanctioned, above-board solution, backed by $1 million in liability insurance provided by Airbnb.”
Clelia Peters, President of Warburg Realty and Co-Founder at New York’s MetaProp, a leading PropTech accelerator program shared some wise words “The real estate industry needs to start looking at tech as strategy, not as IT.”
As you can see, professionals in the multifamily real estate management field are utilizing many different strategies to get a leg up over the competition in the next 12 months. The market is constantly in flux. Renters wants and needs are different than they were 20 years ago and they will likely be different 20 years from now. The commonality between all of their approaches is the focus on consistent reflection and improvement.
Written by: Todd Conway | Updated July 19, 2018