Shifting rental market conditions and rising inflation prompted operators to re-evaluate the definition of property performance and shift their focus to risk mitigation and bad debt management.
During an Apartmentalize 2023 session, industry leaders discussed solutions to power property performance despite unreliable rent growth. The session focused on harnessing and leveraging data throughout the lease life cycle for increased revenue capture.
“Market conditions shift, and as we approach this inflation-driven recession, it’s really time to re-evaluate what we’re doing and how we’re measuring property performance,” said session moderator Kevin Huss, LeaseLock Vice President of Enterprise Sales.
Apartment managers are streamlining operations to establish more efficient assets. By capturing clean data, operators can create powerful information that dictates potential opportunities to increase revenue capture and reduce revenue loss.
“Whether it’s preventing people who won’t pay through the screening process or calculating how much your balance left owing is going to be from a traditional security deposit type of solution, there’s better ways to manage [resident] risk with big data,” said Jeremy Thomason, Executive Vice President of Asset Management and Investor Relations for CAF Companies. “We need to be constantly looking at ways that problems are solved to make sure we have the best solution in place. Sometimes that starts with knowing there are other opportunities or solutions out there.”
Portfolio-wide data can be used to facilitate simple, homogenous product rollouts, although property-level customization has its advantages, according to panelist Johnny De La Espriella, Senior Vice President of Operations at RKW Residential. He said RKW is also using customized lease insurance in lieu of traditional security deposits for enhanced asset protection.
“Traditional security deposits of $500 or $700 don’t capture even a small percentage of what that total balance could be,” he said. “Having a partner and a solution that can help us capture more of that bad debt at move-out is crucial.”
Panelist Kevin Hott, Director of Information Systems and Technology at E&S Ring, said his communities are retaining more revenue as a result of its security deposit replacement platform.
“A deposit doesn’t really cover a lot of lost revenues. It may cover damage,” Hott said. “With these new processes and new programs, we’re able to recover not only damage but we’re also able to recover lost rents. That’s been a huge lifesaver for us.”
Doug Pike is a Content Manager for LinnellTaylor Marketing.