In the world of multifamily, bigger isn’t necessarily better. But being a smaller operator does come with a unique set of challenges.
Larger apartment management companies are working with distinct advantages. They have bigger budgets and operating margins, and more resources at their disposal. They generally have more money for payroll and technology, and through sheer scale can more easily absorb vacancy loss and market fluctuations.
In order to compete, smaller operators have to run a tighter ship, not just financially but also strategically. Fortunately, companies with a smaller market footprint have the benefit of agility. They can better customize both the living and working experience to meet the specific needs of renters and employees.
A property performance plan can make all the difference. We have included five key tactics that can help to optimize NOI for smaller operators.
1. Focus on Employee Retention
The primary focus for onsite teams is often placed on resident retention. However, for operators with smaller portfolios, employee retention is more critical.
Larger firms can typically offer more benefits and growth opportunities, which can sometimes make it difficult for property management companies with fewer than 2,000 apartment homes to attract top talent. But retaining that talent and keeping onsite teams intact can be an even bigger challenge.
Compensating associates well is just the beginning when it comes to employee retention. Incentivizing leasing productivity and creating opportunities for recognition can go a long way toward creating job satisfaction, too.
Setting up associates to succeed and reach those performance benchmarks through a professional and ongoing training program also helps to establish a connection to their work. Employees are happiest when they are confident and productive in their roles.
And maintenance team members are no exception. Service technicians are currently among the most hard-to-fill positions in multifamily, due to the demand for their skills outside of the apartment industry. Incentivizing renewals is a great way to engage and retain maintenance team members.
Also, it is long past time to throw out the outdated one (associate) per 100 (residents) rule. Understaffing is one of the quickest ways to drive employee dissatisfaction. The current ratio should be closer to 1/40 in order to avoid overloading employees and to establish an environment where they can work happily and efficiently.
Smaller operators have the opportunity to distinguish themselves through their customer service, and that can be achieved by building continuity among teams.
2. Invest in Innovative Solutions
While property performance starts with hiring and retaining quality associates, not everything is a matter of manpower. Onsite teams need the right tools to efficiently perform their jobs, and that means strategically deploying technology.
For smaller operators, tech budgets may be limited, but a venerable property management system (PMS) should be standard business practice. Not only does a PMS pay for itself through the efficiencies it creates, but it establishes the foundation for integrations such as training platforms and maintenance workflow systems.
To stay within budgets, companies can also get creative with their uses of technology. For example, some operators use Skype or Facetime in lieu of dedicated virtual or self-guided tour platforms, which often come with substantial price tags and longer implementation periods.
Equipping an onsite team with tools that return time to their workday leads to increased productivity and job satisfaction. This ultimately improves the resident experience, as well.
3. Consolidate Supplier Partnerships
During the pandemic, property technology was developed and deployed at an unprecedented rate. Many property management companies deployed whatever product they felt was needed to maintain operations with a limited onsite presence.
More than a year later, it’s time for operators to take inventory of their tech stack. While many solutions were deployed out of necessity, onsite teams returning to the property have been saddled with a formidable pile of products that they now have to learn. Unfortunately, not all of those pandemic-driven deployments play well with one another, creating inefficiencies for teams rather than enhancing functions.
It’s time for smaller operators to get lean in terms of technology. By consolidating supplier partnerships, onsite teams can get more value from their time and money, and streamline day-to-day operations. Take inventory on what works well, and dispose of technology that no longer makes business sense.
4. Seek Scalable Solutions
While much of the technology introduced during the pandemic was intended for portfolio-wide implementation across hundreds of thousands of communities, some suppliers also designed scalable solutions for smaller deployments. Because a product designed for hundreds of thousands of units might not be effective or economical for a portfolio that features only a handful of properties; product packages were designed specifically for smaller operators, with solutions that are scaled in both service and price.
Property technology shouldn’t just be for the behemoths of the industry. Before smaller operators write off a particular solution, they should inquire about potential plug-and-play packages built with their business model and budget in mind.
5. Consistently Evaluate Resident Satisfaction
At the end of the day, property performance is ultimately measured by resident satisfaction and retention. While there is a direct link between employee satisfaction and resident satisfaction, operators can’t assume that the former automatically equates to the latter.
By gauging resident satisfaction through meaningful surveys and other touchpoint feedback, operators can identify problems before they reveal themselves in the form of complaints, bad reviews and reputation damage. At smaller properties, where one resident review carries greater weight, reputation management is particularly important. A proactive approach enables property teams to resolve renter concerns before a poor resident perspective becomes irreversible, and prevent negative sentiment from spreading.