Strategic Operational Analysis: How Property Management Can Boost Multifamily NOI
In times of economic uncertainty, many multifamily owners seek to increase their net operating income (NOI) through effective operational analysis and adjustments. By addressing operational inefficiencies with quality property management, owners can drive efficiency, differentiate their assets from competitors, and improve cash flow.
Partnering with experienced property managers is crucial in today’s financial landscape as they can creatively solve pain points for multifamily owners. With over 65 years of expertise as one of the largest multifamily property management companies in the western U.S., our company has a deep understanding of industry patterns, challenges and emerging trends. Our unique perspective also allows us to understand landlords’ needs while adding lasting value to their assets.
One major challenge facing multifamily owners is rising costs due to inflation and interest rates along with increasing labor, material and insurance expenses. To address this issue without compromising on quality or service for residents at apartment communities requires seasoned property managers who understand the market where the properties are located as well as resident demographics. This enables them to prevent excess vacancy rates while minimizing downside risk for investors.
Insurance premiums have become a major pain point for many multi-family operators due to damages caused by natural disasters such as fires or hurricanes which have led insurance firms passing on these expenses onto customers resulting in higher prices across various regions throughout the country. As we manage our own portfolio together with third-party client portfolios we take maximum advantage of our size by procuring insurance through economies-of-scale measures that minimize gaps between coverage types resulting in lower premiums.
To further reduce insurance costs we conduct monthly tailgate meetings along with premises safety walks conducted by onsite teams plus an annual unit-by-unit loss-prevention control inspection program including garage & exterior inspections; accounting audits; quarterly Regional Manager inspections among other initiatives which consistently reduces losses leading towards lower premium payments year after year.
Another area where inefficiencies cost multi-family owners dearly is in operating methods, particularly as their portfolios grow. To minimize these inefficiencies property management teams can utilize centralization across the entire portfolio. Our company manages over 165 apartment communities comprising of more than 22,000 units and centralized communications are an essential element of our operations practice.
We have a number of support departments including risk management; training; human resources; marketing and purchasing among others that provide site-level support to employees allowing them to focus on assets & residents rather than being “jacks-of-all-trades”.
Technology has become an integral part for multifamily communities today but identifying the right proptech (property technology) can be difficult for many owners who don’t have time or resources to evaluate products which enable streamlining operations while aligning with ownership’s current & future goals. We also use our own proprietary data system designed specifically for tracking markets where we manage multifamily properties along with their performance.
AI (Artificial Intelligence) is another fast-rising form of technology that stakeholders must consider carefully before implementing it into any segment within this industry since it will never replace human interaction where it really matters most such as nurturing personal relationships between residents & staff members at apartment communities. Instead AI should be used primarily for rote or mundane tasks like market research, ordering supplies etc., freeing up valuable time so staff members can focus on building relationships while maximizing efficiencies wherever possible.
Elevating NOI has quickly become a top priority issue facing multi-family owners today but by partnering with expert property managers who address rising costs effectively along with reducing inefficiencies through centralization plus utilizing appropriate technologies enables them improve operating income while delivering high-quality apartments and exceptional service levels leading towards long-term success.
Laura Khouri brings over two decades worth experience in real estate investment strategies having served as President at Western National Property Management located in Phoenix Arizona .
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