With moving season in full swing, APTly Spoken sat down with Julie Manthey, Vice President of Operations for Western National Property Management, to learn how her company is using revenue management software to ease the summer rush.
APTly Spoken: What are some of the greatest challenges with the summer moving season?
Julie Manthey: On average, a multifamily community sees a turnover rate of about 35 percent to 45 percent each year, and in the peak summer moving months we see this number increase by about 6 percent to 10 percent.
One of the greatest challenges for property managers during the summer season is simply being prepared for this increase in turnover. As challenges vary from property to property, it can be difficult for property managers to predict what this season will have in store.
In order to minimize profit loss during this season, property managers need to be prepared to effectively and efficiently manage this transition in residents. This includes both adequately managing the move out process, as well as providing a seamless transition for any new residents. At Western National Property Management, we have found that the use of revenue management software can be one of the most effective tools for preparing a property for the ever-changing lease expiration cycles.
AS: How have you used revenue management software to combat these challenges?
JM: We are just about complete with the rollout of our revenue management software at each of our communities. This is a long process due to the creation of a training module and measures that ensure the system is working efficiently, and that the teams are adapting effectively.
One way we use revenue management software is to examine a particular community’s history and utilize that history to forecast future trends. This includes identifying which months had the highest turnover rates, as well as which months had the highest rental rates.
By tracking this information, we are able to then make educated predictions on what the summer moving season may have in store based on previous years’ leasing and occupancy histories. Although it is not full proof, utilizing this software can more aptly prepare property managers to handle any changes in occupancy.
AS: How has this software helped to manage resident turnover and increase profit?
JM: In addition to forecasting future trends, revenue management software can also be used to stagger move-out dates and keep track of lease expirations. This allows property managers to manage turnover and also increase profit by avoiding multiple lease expirations at the same time.
By tracking lease expirations, property managers are able to better prepare for move-outs and can limit the amount of time a unit remains vacant. For example, by being aware of a unit’s upcoming lease expiration, a property manager can provide a resident with a renewal notice, giving both the resident and the property manager time to prepare for the move.
The renewal notices allow property managers to begin the turnover process before a resident has even moved out, providing them with the opportunity to complete an initial walk through and also schedule any necessary repairs. In doing so, the unit remains vacant for less time and this ultimately improves the property owner’s bottom line.
Additionally, by examining past rental history the revenue management software is able to predict future rental rates. For example, if a property’s best rental month occurred in September of 2013, the revenue management software would take note of this and automatically adjust rental rates in September of 2014 based on that information. By implementing revenue management software systems, property managers are able to ensure that they are automatically adjusting and maximizing rental rates throughout the year.
AS: In what ways has your understanding and use of revenue management evolved?
JM: It is imperative that we consistently have someone who monitors, understands and moves the “limits” of the programs to fully benefit from them. We’ve found that this consistent monitoring ensures longevity of the management system, and helps to increase its success over time.