Apartment Operators & NOI

Who Will Reduce Labor Staff with AL

There is a lot of talk in the multifamily space surrounding AI (Artificial Intelligence) . Some are suggesting that AI will be the dominant force for many of the daily? tasks we do as Apartment Operators. I happen to be in the believers camp, that this will be true. I believe that the integration of AI over the next 18-36 months will provide such organizational benefits that the 1 to 100 Rule will finally be a Myth. You know, one staff member in the clubhouse for every one hundred units. Apartment Operators have lived by this nonsense for years, even though it was created back in the day when the One Write System was popular.?

One Write Systems were designed to capture information at the time the transaction takes place. These One-Write Systems were efficient because they eliminate the need for recopying the data. The issue with the original idea was that the math needed to add up & down and across. Many readers here may not even remember them. The point of this is that we have had decades of Technology converge on our beloved MutiFamily Operations, yet nothing, including Centralized Leasing, seems to have broken down the 1 to 100 Labor Myth. Why is that??Why are there still Property Managers in every ClubHouse?

Perhaps How Apartment Operators Are Paid

Could it be how Apartment Operators Are Paid? Site Staff Labor Costs are passed through costs to ownership. Apartment Operators have convinced owners & Investors the 1 to 100 Labor Rule is Truth, and they need that to operate the property effectively. The amount of expenses the Apartment Operator tolerates has no bearing on his or her Pay Scale. Apartment Operators are paid a percentage of Rent Collections, 3 to 5%. The other issue is, assuming that said Apartment Operator is average at his/her craft, with both Income & Expenses their “Fee” remains consistent too.?

Oh, One other thing, Isn’t the argument that what our industry labels Revenue Management is really just an accepted form of Price Fixing? I say that to say, even if unintentional? Doesn’t YieldStar share Rental Data, both Occupancy & Rents from many customers in a geographical area and mysteriously come up with the perfect Rent Price based on different renewal terms, occupancy and such from many in said geographical area? It seems like another Situational Ethics argument??

Eliminate Middle Management

The infusion of AI in our daily routine business in the office will also have a devastating impact on White color Office Staff. Those tasks will be done by AI, at a much higher efficiency rate, and will actually get done, every time, on time. Middle Management is such an easy place to hide in most medium to large companies,........Staff is sort of forgotten about, and some are on very shaky ground, even though their Illusion of Importance Drones On,.............

The Rank & File of Middle Managers of the largest REITS and Operators will be blindsided by all of this. They have told themselves of their self importance for years and years, absent any real thought about the only question one needs to remember; Are My Actions Improving NOI (Net Operating Income)?

About Eric

Eric is an Entrepreneur, A Published Author and Writer. Eric lives a Nomadic Lifestyle and is an OffGrid Practitioner. He is also an Instructor for Melinda Emerson Small Biz Lady and an Adjunct Instructor at Drexel University. Eric is well seasoned in urban housing development. He has built and developed over 14,000 market rate apartments on a national scale. He founded Urbane Apartments in 2000 and oversaw new business, general operations, marketing and branding at the company until retiring in 2021. He was long recognized by the multi-family housing industry as a vanguard of cutting edge social media marketing. Eric’s social media marketing and branding strategy has garnered national media attention??