How to Set Up for Multifamily Success in 2023

If you haven't considered a comprehensive 2023 business plan for your multifamily community yet, you're not alone. Many multifamily operators are still deciphering last year's data, as they consider what's ahead. Anticipating the next four quarters is nearly impossible as the current market continues towards an unpredictable landing.

Yet, it's not hard to see multifamily success in 2023 will depend on a variety of factors. Market trends and economic conditions are two of those factors that will affect business operations, specifically for property management teams. With the market expected to remain volatile in the coming years, multifamily operators and property management teams need to proactively set themselves up for success in 2023 and beyond.

"With today’s economic backdrop being so uncertain with raised interest rates, inflation and rising prices, this adds additional pressure to the bottom line for multifamily operators facing lower rental rates and rising operating costs." - Angel Piontek Residential Tech Today

The key to increased NOI (Net Operating Income) in a down market is to use multifamily data and trends to your advantage. By leveraging the right data and trends, operators can ensure their assets are well positioned and still able to generate a steady stream of income.

Data and Trends to Leverage

Data analytics play a key role in multifamily success. By analyzing data on occupancy rates, rent prices, and other key metrics, operators and property management teams can make informed decisions about how to optimize the property for maximum revenue. For example, data analysis can help identify the most profitable units or spaces, which can then be targeted for renovations or upgrades.

Adopting an integrated solution for data analysis should mean scaling doesn't sacrifice quality. When your resident platform is priced based on the number of units under management, you pay only for what you use. Not only does this reduce costs in terms of licensing fees, but also provide better value overall.

Understanding how to maneuver through data deep dives that affect immediate and long-term goals is key to success. Working with?an integrated platform?to perform such deep dives can help reduce the heavy workload and free your team to focus on other tasks that improve the community.

"In today’s capital and finance market, where buying or building new multifamily assets has become markedly more expensive, tech that boosts revenues or slashes expenses for existing properties has become much more exciting, attracting additional investment from VCs and adoption from property owners and institutional landlords." - Patrick Sisson , Commercial Observer

One of the most important trends to leverage in a down market is rental prices. It is important to understand that rental prices often follow the overall economy and are likely to remain low for some time. Through data analysis, multifamily operators can identify areas where rental prices are low in order to capitalize on opportunities for increased occupancy and NOI.

Additionally, multifamily operators should also pay attention to rental growth trends in multiple areas. This data can help operators identify areas where rental prices are likely to increase, allowing them to focus their efforts on these areas and secure more profitable investments.

From Market Demand to Amenities

One trend that is likely to continue in 2023 is the growing demand for high-quality amenities in multifamily properties. Fitness centers, pet areas, and community spaces are improving design and providing a variety of options outside a typical apartment, yet still keep residents inside the community. Add onsite services like personal training, dog washes, and hosted parties, and watch your community come to life.

By investing in physical amenities, as well as branded onsite services, property teams can attract and retain residents while increasing NOI. To understand what potential residents are looking for in an apartment home, ask why they are making certain decisions based on their budget, lifestyle preferences or priorities. By understanding data from your branded tech stack, your team can recognize how your community should provide products and services that meet those needs while still turning a profit.

Another important data set to pay attention to is the supply and demand of units, products like community spaces, and services offered onsite. By understanding the supply and demand, operators can better anticipate market conditions and identify areas of high demand. This data can help operators make informed decisions about where to invest in the future and ensure they are able to capitalize on any potential increases in NOI.

NOI Management Strategies

In addition to leveraging data and trends, multifamily operators and property management teams should also consider implementing strategies to increase occupancy rates and NOI.

One of the most effective strategies for increasing occupancy rates is to offer incentives and discounts to attract new tenants, retain existing residents, and encourage renewals. Additionally, multifamily operators can also explore other strategies such as offering flexible lease terms and increasing amenities to make their units more attractive to potential tenants.

Another strategy for increasing NOI in a down market is to focus on improving the resident experience. This can include things like upgrading common areas, providing more amenities, and implementing a responsive maintenance program. By making the property more attractive to residents, you can reduce turnover and increase occupancy, which will ultimately lead to higher revenue.

Which brings us to resident retention. By focusing on retaining existing tenants, multifamily operators can reduce the amount of time their units are vacant and increase their NOI in the long run. Additionally, multifamily operators should also focus on improving the resident experience by offering excellent customer service and responding to feedback in a timely manner.

One immediate solution a?property management software facilitates is communication among residents and residents-to-management that increases satisfaction for everyone who lives in the building. By providing a positive experience, operators can improve retention rates and ensure their units are occupied and generating income.

Cost Control

A final focus can be on cost control. This includes identifying and reducing unnecessary expenses, such as hiring costs, onsite labor, and concierge services. One popular option is outsourced labor to reduce costs, liabilities and risk related to the operation of communities.

Outsourcing labor can enable you to increase efficiency by freeing up your employees' time so they can focus on other tasks. It can also help you scale up operations by hiring skilled workers who are already in the area or have experience managing multifamily communities.

Automated Success in 2023

As the multifamily sector continues to evolve, operators need to be proactive in setting themselves up for success in 2023 and beyond. Implementing the right management strategies through a combination of automation and in-person service, multifamily operators can ensure their assets are well positioned and still able to generate a steady stream of income.

"Overall, adapting your multifamily business through technology will be the number one trend in 2023, and within this lies a huge opportunity." - Patrick Sisson , Commercial Observer

In conclusion, multifamily success will depend on a variety of factors, including market trends, economic conditions, and the actions of property management teams. However, by focusing on an all-in-one tech platform, and using the latest multifamily data and trends, operators and property management teams can achieve success in 2023.