One of the silver linings of the pandemic is that it’s finally pushed the real estate space to adopt some much needed technology. For the multifamily industry in particular, this new technology has allowed property management teams to get a hold of invaluable data that they otherwise wouldn’t have. With all this new data though, it can be difficult to stay organized and focused. Today, we’ll be going over some of the most important multifamily metrics and KPIs to keep a watch on. No matter the amount of data you might be swimming in, these are the metrics to focus on first.
Multifamily metrics to prioritize
While there are many valuable multifamily KPIs that management teams should be familiar with, these 5 are ultimately some of the most important for managing growth and property resiliency.
1. Occupancy and vacancy rates
At any point in time, it’s important to know your current occupancy and vacancy rates. This allows you to compare your rates against other competing units, along with the market average (around 95 – 96%). For example, if your properties are hovering around 90% and nearby units are at that market average, you know you need to invest in more marketing.
At the same time, if you’re doing better than your competitors, you can always leverage that as a selling point for prospective renters.
2. Lead-to-lease conversion performance
Another important multifamily metric to zero-in on is lead-to-lease conversion timing. The leasing process is a high-touch sales cycle, and one that can vary greatly in timing across different regions and communities. When you make a point to understand the specific performance and timing of each of your units, you can then adjust and optimize your marketing strategy to shorten that cycle.
3. Days to lease
The longer a unit stays empty, the more revenue you lose. Knowing your average days to lease can help you identify gaps in your marketing and help identify specific units that are harder to fill.
Additionally, if you find yourself experiencing a longer days-to-lease cycle, it may be an indication of outside conditions such as a declining market or changing renter expectations.
4. Average renter lifetime value
Understanding the average value each renter will bring to your property is hugely valuable, especially when it comes to planning the success of your property in the long-term. If you see that you’re not meeting your goal, you can always adjust lease values and work to reduce renter churn.
5. Revenue growth
Perhaps one of the most important multifamily KPIs, broadly speaking, is overall revenue growth. If you don’t know this metric, how will you be able to tell how well your business is performing year over year? As this is such an important and broad metric, you can use the other KPIs we mentioned to gain a better understanding of your overall growth.
Creating a practical system for organizing and analyzing your data is one of the best ways to ensure all that data is being put to good use. Instead of being overwhelmed, find yourself empowered to make data-driven decisions that will have a measurable impact on your properties.
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