In multifamily operations rent growth is the most important component to capturing Net Operating Income (NOI) growth. Projecting rent growth is part science, part qualitative. There are many service providers willing to assist property managers in keeping up to date on where rents are within a circle of competitors.
First and foremost is keeping current tenants in-place with advanced planning. Renewals, renewals, renewals. Yes, I know saying “advanced planning” is in the same category as the phrase “past experience”. This is one time when the saying sticks. Here are three ways to capture rent growth.
1. Planning for renewals is a primary methodology of capturing rent growth and maintaining stable occupancy. The more advanced the better. Ninety days is no long an uncommon management planning timeline for contacting tenants about renewing their lease.
2. Utilize non-cash concessions at renewal. From restaurant gift cards to cleaning carpets and updating light fixtures; these are all potential concessions to consider at renewal. The concession offered should be less than the additional rent captured in the rental increase over then next twelve months.
3.Check out MultifamilyBiz.com. This website really has a great focus on technology. YieldStar www.yieldstar.com is one of many software programs that focus their outputs on maximizing income. There are others. These systems are often referred to as revenue enhancement models. Some are scalable, some are not. Choose one that you believe will more than pay for itself in terms of generating increased revenue for your assets.
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Multifamily Insight is dedicated to assisting current and future multifamily property owners, operators and investors in executing specific tasks that allow multifamily assets to operate at their highest level of efficiency. We discuss real world issues in multifamily property management and acquisitions. This blog is intended to be informational only and does not provide legal, financial or accounting advice. Seek professional counsel. For more information, visit: www.MultifamilyInsight.com