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 have 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 net operating income (NOI) for smaller operators.
Property Performance: 5 Best Practices For Smaller Operators
- Focus on Employee Retention
- Invest in Innovative Solutions
- Consolidate Supplier Partnerships
- Seek Scalable Solutions
- Consistently Evaluate Resident Satisfaction
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, sometimes making 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. Due to the demand for their skills outside of the apartment industry, maintenance technicians are currently among the most hard-to-fill positions in multifamily. Incentivizing renewals is a great way to engage and retain maintenance team members.
Also, it is long past time to throw out the outdated rule of one (associate) per 100 (residents). Understaffing is one of the quickest ways to drive employee dissatisfaction. The current ratio should be closer to 1 in 40 to avoid overloading employees and 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 workforce. Onsite teams need the right tools to perform their jobs efficiently, and that means strategically deploying technology.
Tech budgets may be limited for smaller operators, but having a reputable property management system (PMS) should be standard business practice. Not only does a PMS pay for itself through the efficiencies it creates, but it also 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 increases 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.
However, now that we’ve moved beyond that, 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 they now have to learn. Unfortunately, not all of the 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 of 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 and resident satisfaction, operators can’t assume that the former automatically equates to the latter.
Prioritize Resident Satisfaction with Grace Hill
Business success isn’t measured by size, and small operators definitely have the upper hand when it comes to making timely, impactful change. And by implementing these five best practices, small operators become well-positioned to optimize their NOI.
For small operators looking to make financially astute changes, Grace Hill’s can help multifamily property owners and operators prioritize their resident satisfaction using the following robust solutions:
KingsleySurveys
By gauging resident satisfaction through meaningful surveys, operators can identify problems before they escalate to complaints, bad reviews, and reputation damage. With over 7 million residents and prospects surveyed annually, the Kingsley Index™ is real estate’s most comprehensive performance benchmarking database to level-set, compare, and track your property performance against industry standards. KingsleySurveys helps you implement well-timed, meaningful surveys to improve satisfaction throughout the resident life cycle, increase renewal rates, and mitigate high occupancy turnover costs by staying attuned to customer sentiment.
Reputation Management
At smaller properties, where one resident review carries greater weight, reputation management is critical. But managing feedback scattered across the web is overwhelming — and time-consuming. Without a consolidated view, negative reviews could unknowingly deter prospects. A proactive approach prevents negative sentiment from spreading and enables property teams to resolve renter concerns before a poor resident perspective becomes irreversible. Grace Hill’s Online Reputation Management solution — built specifically for multifamily — helps protect your property brand, focus marketing efforts, and increase search volume by providing a single dashboard view of your reviews, listings, and social sites, along with key metrics to help you understand and improve overall performance.
Are you ready to take your operations to the next level and optimize your NOI? Don’t fall for the lie that you can’t compete with the “big guys.” The time is now to flex your competitive position, and Grace Hill can help!
