Apartment management has been transformed over the past two decades. What was once largely a “mom and pop” business is now a highly professional industry. Leading apartment providers, both public and private, are now adopting the technology, marketing, executive, board recruitment and measurement approaches used by other industries, adapting them to meet their needs.
More executives entering the field from outside of real estate as well as higher expectations from investors, employees and residents have inspired many of these changes.
For example, apartment firms are now implementing the same yield-management technologies long used by airlines and hotels by charging different rates to different customers depending on timing, vacancy, lease term and other variables. They also are deploying Fortune 500-style executive-succession planning and consumer product branding/marketing strategies.
Proliferation of Surveys
One of the biggest changes for the better is the increased use of surveys and benchmarkingto evaluate property management operations and to guide the creation of new programs and procedures.
Apartment firms now routinely use resident satisfaction surveys and employee surveys to guide their businesses. While resident surveys are not new, what is new is the frequency and professionalism of today's surveys.
In the past, such surveys were used to evaluate individual properties, but now these surveys are being studied to change corporate procedures and to justify the creation of significant new programs. For example, learning that renters decide whether to renew their leases or not based on the quality of maintenance service they receive led many firms to create rent-refund maintenance service guarantees.
When apartment executives learned that residents were frustrated that it took days to process an apartment application, but only minutes to get new car financing or a new credit card, new resident screening procedures followed. Firms are developing more elaborate lease terms and pricing models based on the results of these surveys, and they are using surveys to evaluate their branding efforts.
Employee satisfaction and compensation and benefits surveys are increasingly prevalent management tools. Company-wide employee satisfaction surveys are being used to refine firm benefits and training programs. Firms also are relying on third-party compensation and benefits surveys, such as the annual NMHC Apartment Management Compensation and Benefits Survey (AMOS), to evaluate and adjust what is one of their largest operating expense items.
New Management Tools
Just three years ago, national firms had no way to compare their turnover rates against industry averages on a job-by-job basis. They could not evaluate their compensation levels relative to industry averages for specific jobs in specific cities. And they could not measure benefit costs, such as health insurance, against competitor companies. With NMHC's survey, they now can.
On the operational level, firms are using the AMOS survey to compare their marketing costs, executive staff performance indicators and other operating measures with those of their peers. Firms that participated in NMHC's Apartment Cost of Risk Survey (ACORS) received valuable details on insurance rates and deductibles, information that can significantly enhance their negotiating position during insurance renewals and financing negotiations.
These newer performance metrics are a hallmark of apartment management executives' increased attention to customer, employee and investor preferences. At the same time, newer corporate performance metrics are enriching the analytic picture of site-level and corporate performance that income and expense surveys sketch. In the years ahead, these surveys will be the basis for smarter decisions on budgets, purchasing, employee benefits and investments throughout the apartment industry.
Jay Harris is vice president of property management for the National Multi Housing Council. Additional information on the NMHC survey is available at www.nmhc.org.