When was the last time you introduced a tool to increase your operational efficiency?
Whether you are a property manager, onsite manager, or an owner, introducing new software is always equivalent to a standing trial.
You have an audience to convince, you must present proof and there is always a chance that things may not work out.
Anytime you invest in automation tool, it chips away a certain portion of your revenues. That's why every purchase needs to be grounded with a cold, hard, numerical fact. In other words, you need to equate automation's impact on your Net Operating Income (NOI).
For anyone in the multifamily industry, NOI is not a foreign concept. Here’s a quick refresher on how to calculate Net Operating Income (NOI).
Net Operating Income = Gross Profit – Operating Expenses
Some purchases are super simple to analyze, while others require a more complex analysis.
When automating a task through a software the question you should ask is: how much effort a task requires and what's the tool's cost?
Notice we said effort. Effort = labor and labor = dollars. Your time is money, and this is actually one of the largest and most critical pieces of the property expense pie.
If you are spending X number of hours doing a task and the result is a $0 return on the property, you must immediately stop doing that thing. It is that simple.
Most property managers think low price = high NOI. Price is not the ONLY metric to evaluate a purchasing decision. Make sure there is value in the product too and evaluate labor as well. Value is key because it is a test of quality and price, NOT just price.
If an automation saves labor or brings you tenants who lease at your property, that is quantifiable and clearly a bang for the buck!
By now, everyone in the industry understands that technology and automation are here for good. But when it comes to investing in it, here’s what stops most property managers from taking the leap:
1. Justifying Cost - It's hard to quantify the dollar value of mundane tasks, team productivity, and efficiency, hence making it tough to justify automation’s cost.
2. Change Management - Switching over to a new software/system is rarely as smooth as you’d like it to be.
3. Reputation Risk – The risk to your reputation should the investment fail to produce the desired results.
4. Fear of Technology – Employees are often skeptical of embracing new technology owing to the perceived threat to their jobs.
5. Onboarding – The time spent training employees and the resulting cost incurred can be a deterrent.
Here are 4 big wins of implementing technology in your company to convince you and your peers:
Automation has helped PM companies reduce operating expenses by at least 15%. Here’s how:
Given that the average vacancy rate in the US is 6%, annual rental income losses can accrue to almost $5000. It is no wonder that property managers rush to find new tenants for a property.
With the right software, find qualified leads 5 times faster and recover most of your lost rent. Here’s how:
Whenever a tenant defaults on rent and/or is evicted, owners accumulate a lot of bad debt. (Seriously, 20% of all renters are currently behind on rent). This drives up OpEx unnecessarily and reflects poorly on the management. Not to mention the cost and efforts taken to file an official lawsuit.
Here’s how you can kill two birds with one stone (we did say we take maximizing ROI very seriously):
Another issue that cuts through your profits is the rising rental scams. Last year only, 43% of property managers were hit hard by lockbox break-ins. A fraud-proof lockbox tech can identify scammers and notify you right away.
Multifamily is a powerhouse of data – data that holds little value without analytics and business intelligence.
A smart tool that can capture the bigger picture for you or your investors can back you with profitable decision making.
LetHub offers intelligent dashboards with clean, consistent data that gets updated in real-time. Here’s how you can capitalize on these metrics:
Decision markers should reconsider their tech stack not just for the above reasons but to stay market competitive. Property management companies are seeing a shift in average profit margins across the industry as they implement artificial intelligence to automate monotonous tasks. Successful outcomes have reduced the risk associated with technology. Act now!
On September 1, 2020 the Centers for Disease Control and Prevention (CDC) issued an Agency Order titled “Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19” which finally expired on July 31, 2021.
Appointments are crucial for property managers. They mark both the beginning and the end of transactions, sales, rentals, and other agreements. Therefore, it is of utmost importance that these appointments occur right on time and as expected with a very low risk of cancellation or no shows. That's where property management automation comes in!
Do you know that 157 US companies with $50M liabilities filed for chapter 11 bankruptcy due to COVID-19? If you don’t want to be on that list, keep reading our article, and learn the best ways to manage your property management business remotely.