It is no surprise that when the market slows down, multifamily operators typically compensate with cost-cutting measures to bolster their margins. On its surface, this is a good plan. But while cutting back and finding efficiencies can help companies stay profitable, the belt tightening may ultimately hurt owners both in the short and long run.
For example, these cuts often come at the expense of customer service and staffing. These sacrifices usually reduce resident retention and hamper property performance leading to retention and occupancy challenges. Instead, multifamily owners should focus their attention on boosting revenue and maintaining occupancy and retention. Operational models that optimize revenue are proving more effective, and resilient to economic factors, than reactionary downsizing and consolidation of resident services. And multifamily owners are learning, now more than ever, that offering flexibility is one of the best ways to diversify a listing and tap into new revenue streams.
Flex your lease
Short term rentals have always commanded a premium over traditional long-term lease models. In terms of NOI impact, driving revenue growth is easier and more effective than saving on expenses. Upside revenue can be increased through variable-stay programs by as much as 40 percent, via furnished apartments available for flexible stays. Flex living management models average a 10 percent NOI uplift, creating greater asset value for the owner.
Flexibility applies not only to the length of stay. Flex living also means that workers can find compatible, quality homes for the length of any project or assignment.
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