The apartment business was rocked, like the rest of the real estate world, by COVID-19. The outbreak changed the playing field for operators in every niche, from mainstream and workforce housing companies whose maintenance and management practices were completely remade, to upscale developers who found that their expensive amenity spaces were strictly limited in terms of occupancy at any given time.
The need to measure
With many amenities and in-person services made harder to implement due to the outbreak, multifamily companies have been forced to do more with what they have in terms of resources as well as staff, even as rents start to rise again. As the saying goes, necessity is the mother of invention.
A critical component of invention is measurement. Seeing what is working and what isn’t is critically important for multifamily owners and BTR providers looking to innovate, refine their operations, and save money. And the multifamily world provides numerous opportunities to measure and iterate, since the sector is comprised of so many convergent elements: hospitality, customer service, facilities management, community management, and beyond.
What to measure
So what metrics should investors in residential real estate and property management companies be focusing on monitoring at their properties?
Of course you’re familiar with things like vacancy rates, various expenses, and resident turnover. Here are some less-obvious metrics every multifamily company should keep track of.
Environmental measures
There is a wide range of environmental metrics that it pays to keep an eye on. Indoor air quality, or IAQ, became a much more widely known metric due to the coronavirus outbreak. But even beyond COVID-19, tracking how clean the air in your building is can be very important, since people want to know they are living in a space that takes their health seriously. Tracking airborne contaminants like Volatile Organic Compounds can help improve your residents’ health and also give them some peace of mind throughout the day. This is also an important metric for achieving some property health and sustainability certifications, should you choose to pursue them.
Advanced big data analytics contribute to a reduction of outages and increase equipment lifetime and energy efficiency.
Beyond IAQ, energy use and water consumption are two metrics that can easily rack up the expenses when left unchecked. Carefully monitoring both of these numbers can clue you in to possible leaks or malfunctioning equipment before the costs stack up too high. This can be achieved by simply monitoring monthly utility bills, but the more proactive approach involves sensors on things like water lines and HVAC systems possible thanks to the partnership of Flowbox and Spaceflow. FLOW helps you optimize building maintenance by detecting anomalies, eliminating human errors and performing preventive & predictive maintenance that uses AI machine learning principles. Advanced big data analytics contribute to a reduction of outages and increase equipment lifetime and energy efficiency.
Resident opinions
Your team more than likely keeps track of anecdotal opinions shared by residents during the leasing process, throughout the day to day operations of the property, and at the end of the lease. But making this process more formal and measurable is a good idea because it can provide very meaningful, actionable insight into what residents want and don’t want. This sort of primary-source information can sometimes surprise even the expectations of experts within the business.
There are many opportunities to gather information on resident opinions. Formulate and ask questions during the leasing process, throughout the duration of their residence, and as they leave your property. Include a simple survey with the events you run, to gather information on what activities people like the most. And whenever you change something, ask a few questions about whether your residents like it.
"If a particular space or feature isn’t drawing a crowd, it should be swapped out for something else or promoted."
Amenity engagement
If full-on surveys are too much to pull off, consider tracking engagement with your amenities and tenant perks. Sometimes this will be easy, for example, if you’re instituting a neighborhood rewards program. But if we’re talking about physical amenity spaces, think about asking residents to check in or book in advance, or else installing an occupancy tracker to gauge use throughout the day and over time. This can help plan future amenities or convert underperforming amenity areas into more monetizable spaces.
Each amenity in your space should be helping build an engaged community, and if a particular space or feature isn’t drawing a crowd, it should be swapped out for something else or promoted.
What’s going on at competitor properties?
Are you tracking what competitors are doing? It can be easy to lose track of other properties after the acquisition, but monitoring competing buildings can be a great way to stay ahead of the curve. For instance, monitoring lease concessions can help provide insight into pricing. For an even more unorthodox example, think about watching what amenity packages your competitor buildings offer, and consider shoring up gaps in your own property in order to boost leasing effectiveness.
Also, keep an eye on upcoming competitor properties. They will often advertise their finishes and amenities before construction finishes, allowing you to potentially step in and offer the very perks they’re hoping will set them apart.
These are only a few of the nontraditional metrics that every multifamily owner should watch. There are more that we will cover in a future article, but beginning to track these four areas will give you a step up over competitors who are comparatively in the dark.
