Property automation that allows for a refocus on resident retention can help defend occupancy rates moving into 2023.
By Mike Branam
Head of Multifamily Sales
The last three years profoundly changed things, and we now live with certain realities. While COVID changed many aspects of our lives, we have been looking forward to putting the pandemic in the rearview mirror, and while we are approaching that welcomed stage, news of a pending recession appears to be the next hurdle that we need to jump over.
Despite seeing layoffs, rising prices, raised interest rates, and inflation, the economic landscape — while not destabilizing — is uncertain.
This will become both a challenge and an opportunity for the multifamily sector next year.
It will be the first year that operators feel significant pressure on their bottom line since mass adoption of rental technology accelerated during the pandemic. They are going to have to take a serious look at how their staff are being deployed and the value they deliver for the business.
Lower rental rates and higher operating costs are going to create a sense of urgency around this and, together, these will be the big themes of 2023. However, there are things you can do to shore up your multifamily business and defend occupancy rates across the year.
Focus on retention as rents are set to decline in 2023
The national rents index fell by 1 percent through November, marking the third straight month-over-month decline and, according to the Apartment List, this was the largest single-month dip since 2017. With declining rents, retaining revenue by ensuring residents renew their leases rather than moving elsewhere, will be the absolute priority for managers and operators.
According to a report from Zego, in 2021, the average cost of losing a resident was $3,850. Resident satisfaction is the only thing that will protect multifamily businesses this year. Renewal rates are the only show in town and intelligent tech solutions are the battleground operators will use to boost their renewal rates.
Occupants of multifamily units are now spending more time in their apartments than ever before. Property staff must place additional emphasis on keeping residents happy so that they choose to renew rather than look for a cheaper deal and a better experience elsewhere. According to research, residents with seven or more friends in their apartment community are 47 percent more likely to renew their lease.
With declining rents through 2023, a successful and profitable building will need to foster loyalty from its residents by meeting the increased expectation for a good resident experience.
One way to achieve this is to foster communal living through events and activities. Providing a connection with the community and other residents reduces the risk of churn as residents are less likely to make decisions solely for financial reasons.
This focus takes time and money – owners & operators who have adopted the most automation are well-positioned to refocus on resident experience. Property managers’ most important resource when it comes to resident satisfaction is the personal touch.
The entire connection with tenants is about to be reimagined towards relationship building, community and enjoyment. It’s no exaggeration to say that the job description of the property manager will change permanently while their old day-to-day role steps into the background with the help of technology.
Re-evaluating and repurposing staffing models to high-impact roles in 2023
Remote access solutions allow prospective residents the convenience of a self-guided tour, reducing the need for onsite leasing agents.
In addition, managers no longer need to be physically available to allow maintenance access. Technology has allowed these roles to be repurposed towards the softer skills required for community building and relationship fostering. Organizing social events and creating an engaged cohort of residents can be accomplished by picking and choosing technology that removes the need for automated tasks to be done manually.
In 2023, focusing on residents’ happiness will be a far more critical retention tool than arranging for a repair person to mend a water leak or fix a thermostat, especially if you can get tech to prevent the issue from occurring in the first place or alerting you to a problem as soon as it arises.
In-unit, smart tech solutions increase resident satisfaction
Residents living in an increasingly tech-led world want and expect smart tech solutions and property automation.
If a resident leaves their apartment, forgetting to turn the heating off, they don’t want to worry about the utility bill. With a couple of taps on their smartphone, they can manage all heating, air conditioning, and water systems without fuss. If your resident forgets to lock their door or wants to let someone in to walk the dog, it’s all easily managed remotely, with no hassle and instant peace of mind.
Property automation and a seamless technology experience improves resident satisfaction with their multifamily community. Once a resident sees the benefits of smart tech, it’s hard to go back to an apartment without smart features.
For multifamily managers and owners, a relatively small investment in hardware and software tools for access, home monitoring and guest communication can significantly reduce resident churn costs.
For multifamily operators that haven’t yet invested in automation technology, the challenge will be how to redeploy resources towards community management and keep up with competitor buildings that are already moving towards these solutions to build stronger operations in 2023.
About the author:
Mike Branam is the Director of Multifamily Sales at PointCentral, a property automation platform for apartment owners & operators. PointCentral is a wholly owned subsidiary of Alarm.com, the leading platform for the intelligently connected property. Millions of consumers and businesses across 50+ countries depend on Alarm.com’s technology to manage and control their properties from anywhere in the world. www.pointcentral.com