In the fast-evolving world of multifamily real estate, collecting accurate market data has always been a cornerstone of successful property management. But how we gather that data has undergone a significant transformation over the years. In a recent conversation, Clay Llewellyn, COO of Income Property Specialists (IPS), took us through this fascinating evolution, providing real-world insights into how the industry has shifted — and where it's headed.

In the early days, market data collection was a labor-intensive process, heavily reliant on manual efforts. Leasing consultants would call competing properties to gather pricing information — a method fraught with inconsistencies and inaccuracies.

"We had to do all of our market survey calls on a regular basis... It was always very manual. It was a very tedious and frankly inaccurate process" — Clay Llewellyn

Not only was this approach tedious, but it also presented a host of challenges. Data accuracy was questionable, and staff often faced issues with non-cooperative competitors and outdated information.

The Shift to Automation

As the multifamily sector grew, so did the need for more reliable and efficient data collection. IPS embraced software to automate market surveys, moving away from the phone-based manual methods.

"Pushing towards an automated revenue management platform... allowed us to get larger market data of that neighborhood and area." — Clay Llewellyn

Automated tools brought several benefits — they reduced labor costs, expanded the dataset beyond traditional comps, and delivered deeper insights into market trends like rent movements and concessions.

However, this approach wasn't without its pitfalls. Overreliance on private data began to raise concerns across the industry, ultimately leading to a major pivot.

The industry's reliance on private data soon faced legal scrutiny, and IPS made the strategic decision to revert to manual surveys — but this time with a centralized approach.

"For the benefit of ourselves, our clients, and the liability exposed... we brought it back manually, brought it back in-house." — Clay Llewellyn

Instead of burdening on-site teams, IPS centralized the process under one dedicated resource, creating consistency and reducing the training burden. Yet, some market nuances were lost without the local, on-the-ground insights that on-site teams once provided.

"There's a lot of nuance in that market, in that neighborhood, that gets lost when it's one person in a centralized area conducting the survey." — Clay Llewellyn

Recognizing the limitations of manual surveys and private data concerns, IPS eventually partnered with ApartmentIQ, leveraging public data and cutting-edge technology to refine their market intelligence.

"It checks the most important box for us, which is the reliance on public data. But it's also an automated tool that takes away a lot of those man hours." — Clay Llewellyn

ApartmentIQ provided valuable metrics like average days on market for vacancies — a critical indicator in rent-controlled environments where pricing strategies require finesse.

"It tells the story of what's happening in the market right now. If you look at enough of those snapshots, there's a trend." — Clay Llewellyn

By focusing on what prospective renters actually see — the publicly listed rents — IPS could more accurately position their properties competitively, regardless of any behind-the-scenes concession data.

"We're comparing ourselves against what the public is seeing." — Clay Llewellyn

IPS's journey underscores several important lessons for the multifamily industry:

• Efficiency is key: Automated solutions reduce labor costs and human error.
• Data accuracy matters: Reliable, real-time market data enables better pricing decisions.
• Public data offers advantages: It reflects what prospective tenants actually encounter during their search.
• Compliance is non-negotiable: With legal scrutiny increasing, using public data mitigates risk.

The evolution of market data collection in the multifamily industry is a story of adapting to technological advances, legal landscapes, and the realities of onsite operations. As Clay Llewellyn's experience demonstrates, staying ahead means embracing change, leveraging new tools, and always keeping an eye on both efficiency and compliance.

For those still relying on decades-old methods, the time for change is now.

"External forces really drive change... sometimes a real blessing, even though there may be cost to it." — Clay Llewellyn