3 Key Questions to Determine Midyear Performance
Establish and measure goals midway through each year to ensure that your apartment community is on track to meet or exceed expectations.
The second quarter of the year has already come and gone, so now is a great time to take stock of how an apartment community is shaping up financially for the end of the year. Apartment-community managers and owners should be well versed in the numbers required to adequately represent a property’s financial standings by using occupancy rates and taking into account operational expenses, such as promotional rents and lease-turnover expenses.
Property Management Minutes recommends asking the following questions:
- Is occupancy meeting or beating projected results?
- How do the year-to-date expenses compare to the budget?
- How do [the year-to-date expenses] compare to the expense level from a year ago?
Answering the first question is one way to measure the success of marketing campaigns and other leasing activities. But even if occupancy is strong, if increases in market rents aren’t factored into new and renewing leases, the apartment community will be operating with decreased rent revenue, compared with the local market.
And all may be going well with attracting new residents to an apartment community, but if expenses aren’t controlled, the community may find itself with a shortage of net operating income. One way to cut down on expenses is resident retention, which alleviates turnover costs.
By checking in at the midyear point, apartment-community managers and owners have the opportunity to course-correct to ensure goals are met by the end of the following six-month period. This may include eliminating rent promotions or focusing on a resident-engagement program.