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One of the biggest pain points in property management is adjusting business needs to align with market conditions. Pricing units to compete against competition, anticipating market changes, getting a comprehensive view of a property’s performance — these are all very important factors for property management professionals to consider as they work to grow their businesses in an industry more impacted by market swings than most.
Pricing units is a complex process, especially when done manually (which so many property managers still resort to). Market fluctuations happen in the blink of an eye, so adjusting unit pricing requires constant attention. With the potential for human error and the extra time and resources required for this, I don’t believe manual processes are going to be a good bet through 2019.
The same is true of getting a holistic view of business performance. It’s difficult for a real estate professional to manually gather all the insights about a business and identify trends and roadblocks. That could take a lot of time for the data itself, and what it means for the business may be difficult to decipher. Additionally, given the time it takes to manually procure a mass of data, it might be stale by the time it’s ready for analysis. That’s why understanding business performance is much more valuable (and allows for more agile decisions) when getting insights in real time.
Real-time data, produced by advancements in automation, needs a place at the table in property management. Automation procures data and produces immediate insights on what that data means for a business, helping property managers make better-informed, more strategic decisions more quickly and, ultimately, leads to increased revenue streams.
Your Best Price
When pricing a unit, there are many tricky factors that come into play, including supply and demand, rental competition and market value fluctuations. However, advancements in technology can eliminate the pain of the pricing game by arming property managers with rent recommendations based on insights from data. This lets property managers adjust quickly to market fluctuations to better position themselves against their competition.
Setting an appropriate price point for a unit listing is critical, especially in rapidly changing real estate markets like Orlando, Las Vegas, Phoenix and Tampa, to name a few, where rent has grown tremendously year over year. A great rent price several months ago may now be below market value in these cities.
Capturing of-the-moment, market-wide insights ensures units are always appropriately priced, thus helping property managers maximize capacity for rent collection. Why? An appropriately priced unit won’t stay on the market for too long, and that creates more revenue for property managers than if the unit had remained unfilled. Additionally, there’s an assurance that the price is, taking into account market data, not listed below value. Having the right price is critical in realizing more and consistent revenue.
Property Gut Check
Data also answers questions about the performance of the property at hand, giving real estate professionals the ability to uncover areas in which they need to do better or areas that are of high value to them. For example, real-time data insights give visibility across a variety of areas like the average maintenance work order completion time, year-over-year data on turnover and lease renewal rates, or how energy-efficient a property is. The data helps property managers better understand where their business needs improvement and how to affect that change.
A good example of how real-time data can help a real estate business is by looking at how long it takes employees to complete daily tasks over a certain time frame. Is there an evident holdup anywhere that is obvious in the data? Any unusual outliers? Learning what those timely roadblocks are and then taking action to solve for them will help a property management business run more efficiently and, ultimately, keep tenants returning — a major factor in growing revenue.
Another benefit to having granular access to data is that it creates greater transparency across a business, which leads to more conversations and collaboration within property management teams. This sets the stage for a more efficient business environment that is adept at quickly processing work orders and issuing more concise and consistent tenant communication, which reduces tenant turnover and leads to more consistent revenue.
Getting Started
Ultimately, the best way to get started with data is to, first, determine what decisions you want the data to guide. What is the data that is most important to your business? Perhaps it’s very specific to a certain area of business, such as allocation of marketing dollars and success rates there. Property managers could use data to uncover the sources from which tenant leads are converting at the highest ratio and identify sources where leads are not converting well, and then decide to shift budget. This data analysis can even be done manually in a smaller business and is already tracking where prospective tenants come from originally. Apart from marketing, there are so many other areas in which data will help identify gaps, such as maintenance and renter satisfaction. Figure out the problem that needs solving, uncover the gaps and use that knowledge to make smarter business decisions.
Using data to spark revenue growth is a great way to ensure continued success through whatever market dips and upswings come your way. It not only ensures a property is getting the maximum rent it can achieve, but it can also unveil deep performance insights about how an entire business is functioning at both the operation and employee levels.