Watch this Rent Roll Analytics demo to see how we can closely examine rent for each unit and determine what adjustments to make.
This is based on a real project for a multifamily operator with 2,500 units.
Rent Optimization Questionnaire
Use this questionnaire to decide what data to analyze for optimizing rent
Examples of questions included in the questionnaire …
- What is our Gross Potential Rent?
- Which units have had no rent change in the last 12 / 24/ 36 months?
- What is the spread between the lowest and highest rent for each unit type by property?
- What is the market rent for our unit types and properties?
This questionnaire will help you decide what internal and external data to compile in order to optimize the rent for a property or a group of properties.
RENT OPTIMIZATION
Are you getting the best rents?
What is Rent Optimization?
- Lease rent, move-in specials, rent relief are “levers” that impact operating income, vacancy and brand perception
- Rent Optimization seeks to find the right mix of these in order to drive the outcomes you want
- Rent Optimization takes into account data from your property management system, from external sources as well your assumptions (about how much impact changes in any of the levers have on the outcomes)
- We put together analyses for analyzing, for example, a $100/month change in lease rent on operating income and vacancy
Why Rent Optimization
- Most executives want to know the lease rent is compared to Gross Potential Rent
- However, Gross Potential Rent is based on many assumptions (such as market rents, historical rents, customer feedback etc.), and analytics helps validate those assumptions and find opportunities for differentiation
- Differentiation creates the opening for deviating from market rates, and our Rent Optimization solutions help focus on the type of differentiation that is most impactful (for example branding, customer surveys, amenities, discounts etc.)
Challenges
- Quality of the data available for analysis
- While internal data is readily available (we pull lease information going back in time), external data is not so reliable
- Market rent data purchased externally might provide zip code level data but is often insufficient. There is still significant differentiation between adjacent properties that cannot be accounted for in purchased data.
- Willingness to make assumptions about the impact of levers on outcomes (for example, “Raising rent by $100 will result in 10% fewer leads and 10% fewer lease signings”)
Solutions
- We start off by collecting historical lease information (lease start /end dates, lease rent, property, unit type)
- We also like to see a “Potential Rent” column for each lease. Some systems already contain this, but if it is not available, we populate it manually
- External data, if available, is also added to the database
- We also super-impose data on number of leads, number of applications, early terminations etc. in order to visualize any correlation
RentViewer
Our solutions are built on the RentViewer software. RentViewer connects to data sources (such as Property Management Systems, other systems and Excel files), collates the data and enables the creation of Executive Dashboards, Custom Reports and Analytical Solutions
Do you have questions and need detailed explanation of how our product could help your businness?
The Property Management Metrics Handbook
Which property management metrics are important to you?
See a list of over 100 metrics for categories such as:
- Lead Management Metrics
- Lease Application Metrics
- Unit Turnover Metrics
Use the Handbook for ideas on metrics that will be useful to your company.
Decide which property management metrics should be tracked and used for setting improvement goals.