Ways Property Owners Can Increase Apartment Net Operating Income During COVID-19
The question on every Operator’s mind since COVID-19 arrived is, “How do I keep the current units I have leased and limit the property’s expenses?” The measure of income versus expenses is the most vital measure for an apartment community’s health. The last decade has been financially prosperous for the multifamily industry and navigating how to meet financial goals were relatively relaxed. Fast forward to today and you have a completely different story. Below are a few tips and tricks you can adopt into your apartment communities to help boost your NOI.
Your Retention Rate Matters
The good news? The costs associated with repeat business are significantly lower than acquiring new business. To break it down further, the residents that currently rent from you are more likely to rent from you again. Your renewals list is your golden parachute, be sure to call residents 60 to 90 days before their lease ends to encourage them to renew their lease at your property or a sister property. Consider discounting a small percentage off the renewal price to lock in the existing resident. By doing so you will keep the make-ready expenses down.
Reevaluate Your Renovation Schedule
Upgrades to a property help entice more residents to lease which in return brings money in the door. However, performing major construction upgrades can be an inconvenience to your residents, especially when the renovation requires them to move to a different unit. The key here is to keep as many of your current residents in place as possible. Postpone renovations that displace your existing residents until things smooth over in the job market and economy.
Stretch Every Dollar
Like many across other industries, cleaning supplies have contributed to increased expenses during the pandemic, but you can use it to your advantage. One thing you can bet on is your suppliers wanting you to order more and now that you are make sure to negotiate lower rates. If you are going to spend more, more of a discount should be offered.
By carefully watching expenses and taking thoughtful steps towards keeping occupancy revenue up, you can continue to maximize NOI even during a pandemic.