How Multifamily Operators Can Maximize NOI

Corporate level respondents cite talent retention, technology/automation and ancillary income as key areas of opportunity for maximizing multifamily NOI growth in 2022, according to a joint industry study by LeaseLock and Grace Hill.

The 2021 Apartment Visionaries Research Report surveyed nearly 300 multifamily operators on their primary asset performance issues, as well as the success of the technology solutions they implemented across the five stages of the apartment leasing process.

While rental housing owners have increasingly deployed technology to bolster and streamline operations, the study shows that the solutions which best resolve common pain points haven’t necessarily received the corresponding resources required to realize their full benefit. 

That said, the industry’s embrace of technology solutions should serve it well as it evolves to meet the needs and demands of the modern renter.

Among those who cited “hiring/talent retention” as a top challenge, a plurality (39%) indicated that technology could be used to address this talent issue.

Three Key Areas

Touring. In-person touring with a leasing agent proved the most effective tour type in 2021, with 67% of respondents reporting that in-person agent-guided tours accounted for more than half of total tours in 2021. Nearly 80% say this tour method also produced the best closing ratios.

Concessions. While free incentives have negative implications for economic occupancy, operators tend to lean on free incentives to drive lease signings. 

Nearly 60% of property-level respondents said that offering free incentives improved the likelihood of lease signing the most, followed by 41% who cited reducing monthly rent.

Among corporate leadership though, 69% cite this lease concession as hurting economic occupancy the most. On the other hand, only 3% indicated that eliminating deposits hurts economic occupancy.

Rent Loss & Bad Debt. Risk mitigation strategies and tech solutions that double as an incentive for renters while also protecting against bad debt could be effective in 2022.

Of those who reported more expenses tied to unit damage, 65% said that those expenses exceeded the security deposit amount.

For 2021 overall, operators cited hiring/retaining talent, delinquent rent/bad debt, and new/changing legislation as their main challenges.