Why Property Managers Should Care About Data

The following is a guest post by Rentlytics, a member of the MRI Partner Connect program.

Why Property Managers Should Care About Data

If you ask property managers how they make decisions, most will tell you they rely on years of hands-on experience, local market knowledge and intuition.

However, even property managers with years of experience can make mistakes. You may know your properties like the back of your hand, but things are always changing. Intuition, while valuable, should still be backed up by hard data.

Data is a powerful tool that is often underutilized by property managers. Most managers look at metrics to measure property performance like occupancy, traffic numbers, and delinquency. However, the majority of property managers don’t do any analysis of trends in these metrics over time.

With the right business intelligence platform, data can offer powerful insights to help property managers surface new findings that may not be immediately obvious, and vastly improve a property’s operational efficiency. Here’s why every property manager should not only understand data, but love it and use it daily.

Beyond Budget

Most property managers are familiar with using data for monthly budget variance and financial analysis, but that’s about it. While performance against budgeting is vital, it is — by definition — a reactive metric. Your budget analysis is a look at what happened in the previous month or quarter, and tells you whether you hit your goals or not in terms of revenue and expenses. However, data can do so much more than look at the past.

Data can help you understand patterns and help guide your path going forward. For example, if you do an analysis and find out one property has historically had high vacancy rates, you can increase the ad spend for that property to drive up traffic. Then, data can help you track whether that increase in ads was effective in growing effective rents or creating a higher number of new leases.

Guided by Numbers

The key for property managers is separating controllable factors from uncontrollable factors within the data. Uncontrollable, and therefore unhelpful data points in the near term include things like property taxes and insurance. While the rates may change over time, those things are outside of your control as a property manager.

However, there are a number of controllable factors that you can influence and change. These include things like marketing spend, make ready costs, and effective rents. These metrics then directly affect your property’s outputs, including delinquency, vacancy and total revenue.

As a property manager, you should keep a close eye on the inputs, and measure the effectiveness of each in the outputs. These metrics are not in place to tell you what to do, but rather to guide your decisions. If you’re not able to lease a property, is it because you haven’t spent enough in renovations, or because it’s not priced well for the area? The data can show you the answer, and help inform your decision making going forward.

Be Proactive

Using data effectively is all about becoming proactive, instead of reactive. Instead of waiting for your manager to find a problem in the delinquency rate at one of your properties, new tools exist that enable you to analyze the data yourself and find the issue first. Then, instead of having to answer on the spot, you will come to the meeting prepared and ready to offer a data-informed solution to the problem.

You can see how this will immediately impress any manager. With data backing up your decisions, you will have more weight behind your ideas and more information to back up your decisions. Instead of stating an opinion, you know that you’re making the right solution to drive operational results across the portfolio. While data can never replace your knowledge and intuition as a property manager, it can and will improve it.

About the Author: Cara Hogan is the Content Marketing Manager at Rentlytics, the new standard in multifamily real estate business intelligence. Cara has a background in Software-as-a-Service, analytics, and has written extensively about the intersection of technology and business.

 

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