Tracking performance is important to any business. Whether it’d be across a social media platform, corporate website, or a Google results page, it’s vital to see where you stand in comparison to your competition. This is exactly why Key Performance Indicators, or KPIs, typically come in handy for many businesses, serving as a source of invaluable information for any ambitious leasing team.
Defined as measurable values that demonstrate how effectively your company achieves business objectives, KPIs offer a comprehensive way to measure the health of your multifamily property. They can better inform your business approach, help your team gain worthwhile leads, and ensure resident satisfaction. In fact, applying and evaluating various KPIs to your business strategy is beneficial across all industries in some way, shape, or form.
Even still, you might wonder how best to establish worthwhile KPIs, so you may receive the proper intel needed to accomplish your end-goals. Too often, companies blindly adopt certain KPIs, and then wonder why they fail to advance their business initiatives. The reality is that every business is different, even in the multifamily sector, and there are no one-size-fits-all to KPIs. To inspire your very own strategy, we’ve compiled a short list of the top KPIs to consider tracking in 2021 and beyond.
Occupancy and Vacancy Rates
Occupancy and Vacancy Rates is arguably the most fundamental KPI for multifamily professionals to track, since it reveals how fully leased your community is at any given time. Of course, it’s important to remember that the current state of the economy has increased apartment vacancies. Recent numbers show that 28 percent of property managers are holding on to empty apartments for longer than usual. Even still, using your PropTech provider’s analytics dashboard to track these figures is a great way to ensure that your team is doing everything to meet their target occupancy rate.
Average Days to Lease
Referring to the number of days your apartments remain vacant until a new resident moves in, Average Days to Lease is an indispensable KPI to track in our industry. It will help you determine how long, on average, your apartments remain empty and how many dollars you spend on these vacancies. No community wants to maintain dozens of vacant apartments, so this measurement will go a long way in helping your team fine-tune your leasing strategy and boost future occupancies. Once you understand your community’s Average Days to Lease, you can work on developing new and creative marketing ideas that will encourage renters to sign or renew their lease, like a look and lease application fee discount or a complimentary gift card upon renewal.
No matter how attractive your apartment community is to searching renters, it is far more expensive to pursue and place new residents than it is to retain the ones you already have. Once you factor in all of the expenses associated with marketing and preparing an apartment for leasing, high resident turnover rates can easily cost you thousands of dollars per month – and that is just for a single vacant apartment. That’s why the most seasoned multifamily professionals turn to Resident Turnover KPIs to take note of how many residents are moving out, in addition to how long they were with your community. Is it long-term residents who are vacating? How many short-term renters decide against extending their agreements? Confirming this type of information help you refine your retention strategy, particularly when it comes to resident satisfaction.
One of the best ways to stay on-track with your business goals is to measure Key Performance Indicators, such as these. Doing so will allow you to take an objective look at your business’ overall health and identify the areas in need of improvement. After all, you cannot monitor what you do not measure, and failing to do either is sure to harm your community in the long run. Though the process of managing and tracking KPIs may initially seem burdensome, the work is sure to pay off once you are able to get an all-encompassing view of your community’s performance.
Kerry W. Kirby is a global entrepreneur, technology innovator, philanthropist, and the founder of 365 Connect, an award-winning technology firm within the multifamily housing industry. Over the course of his career, Kerry has been the recipient of an array of highly acclaimed awards, including the esteemed Louisiana Governor's Technology Award. He has been named to the Silicon Bayou 100 List of most influential entrepreneurs for nine consecutive years and has received a prestigious Titan Entrepreneur Award for his technological achievements. An acclaimed speaker, author, and award-winning podcaster, Kerry has appeared on the BBC Digital Planet program, NPR News, and various media platforms and outlets. He has contributed to an array of articles and studies on the convergence of technology in the rental housing industry.
Kerry serves on the Board of Advisors of Rainbow, a national nonprofit organization that provides service-enriched housing programs for affordable housing communities across the country, as well as the Board of Advisors of the Multifamily Women’s Summit, an event that allows women to strengthen their expertise, influence, and professional network in the multifamily housing industry. He is Chair of Technology Initiatives for the Multifamily Innovation Advisory Council, a private, members only group focused on assisting owners and operators of multifamily communities identify pain points and explore innovative solutions that will drive change across the industry.