The last week of February 2020 saw the most market volatility since our last recession in 2008.  That shock was a wake up call to reassess current business strategies.  We have been in a bull market for nearly 11 years, and during that time, Multifamily companies concentrated on optimizing leasing and other revenue generation technologies and processes.  With growing demand and revenues, those strategies made sense and positively impacted Net Operating Income (NOI).  Now, as demand starts to soften, it’s time to look at the other components of the equation.  It’s time to optimize maintenance and turn processes to create efficiencies that save money and increase resident satisfaction.

Net Operating Income is a combination of revenue and expenses.  If there is downward pressure on revenue, then the only way to increase your NOI is to reduce expenses.  While reducing expenses is often a painful exercise by reducing headcount and cutting resident services, it doesn’t have to be that way.  The key, is understanding how to use your resources more efficiently.

Being a maintenance software provider, we think a lot about how to create efficiencies within our industry’s processes.  What we’ve determined is the key to driving efficiencies is to leverage software solutions that are focused on optimizing your underlying processes.  What doesn’t work is software applications requiring companies to define their processes based upon the features of the software, or having multiple software applications that don’t talk to one another in support of your turn, maintenance or operations processes.

The types of solutions we see to help the expense side of NOI are:

 

·         Process Optimization:

 

·         Management Oversight Optimization:

 

·         Resource Optimization:

 

The economy will change, so be prepared.  Start working on your process efficiency strategies, so if demand starts to drop, you’ll still be increasing your NOI.