Elik Jaeger President & CEO at SuiteSpot Technology, frictionless facilities management PropTech for multifamily operators.
As an asset manager, it’s your responsibility to ensure that your assets remain competitive and relevant, manage risk, drive revenue growth, and consequently find ways to increase the value of your property. If those assets include multifamily properties, that’s a challenging job requiring multi-faceted focus.
A multifamily property is laden with potential liability, as it acts as a home for hundreds or even thousands of people. Plus, housing an entire community means lots of wear and tear that increases operating expenditures and erodes value over time.
However, with diligent focus on asset preservation, a well-managed multifamily asset can provide accretive returns and be a valuable component of a diversified real estate portfolio.
How is an asset manager supposed to keep an eye on all the day-to-day exposures that negatively impact the value of an asset? In many situations, knowledge is power. One valuable tool to gain that knowledge and maintain strategic insights on asset performance is with property operations technology.
What Is Property Operations Technology?
The demands of running a multifamily property are greater than ever before, where thousands of activities, people and third-party vendors must be highly orchestrated to deliver on the promise of frictionless operations and a great resident experience.
Property operations technology is used by multifamily operators, managers, and asset managers to track and gain insight on turnovers, renovations, inspections and maintenance management. With this knowledge in hand, property managers can make better decisions about the operations of the property, and asset managers can stay two steps ahead of any potential liabilities and value-reducing issues so they can better protect the value of their assets.
Here’s how property operations technology helps asset managers effectively manage their assets.
Property operations technology can reduce liability. This software can help monitor and reduce the liability of your property by alerting staff to potential hazards, such as when smoke alarms need to be checked or a roof repair has been on hold for an extended period. Effective capital planning and budgeting ensures that funds are allocated appropriately, increasing asset lifecycles and negating unforeseen expenditures. From a risk management perspective, alerting management to potential problems before they happen helps avoid issues with tenants and potential legal exposure, which may have negative reputational and financial impacts.
Tech can enhance value while reducing costs. Part of enhancing your property’s value is extending the useful life of key structural elements and equipment. Property operations technology can help support these initiatives by making sure preventative maintenance tasks get done programmatically and cost effectively, which preserves the long-term value of the asset and defends against revenue interruption due to events which may hinder stable occupancy levels.
For reducing costs, property operations technology helps property staff follow streamlined processes that eliminate waste, such as automatically checking to see if an appliance is under warranty before completing expensive repairs or replacing the unit.
Cost alerts will notify you when turnover exceeds a certain percentage, a repair was quoted at 25% higher than last time, when a budget for a project has been exceeded, etc. These slow leaks of money can cost a multifamily property thousands and even millions without anyone noticing unless a property operations technology system steps in to monitor and highlight such anomalies.
Faster turnover means better timelines and speed in recapturing revenue. Property operations technology helps property managers turn apartments over faster by creating automated task lists for turnover activities like painting, repairs, materials, vendor and staff schedules, and more. These automated tasks mean re-work and delays are reduced and the units go back on the market faster, meaning less vacant time and more revenue.
Property operations technology software helps with budgeting. One of the most useful features of operations tech is its ability to more effectively project budget expenditures based on future repairs and replacements drawn from historical data of the property. Being able to look into future costs can help asset managers work collaboratively with property managers, do more structured capital planning and achieve more robust cost recovery through tenant revenues.
Reporting provides a 30,000-foot view. Property operations technology’s reporting and analytics can help you visualize exactly where your property stands now to help you make future predictions. You’ll be able to strategically develop capital and operating expenditure budgets as well as evaluate, monitor and revise property financing, capital spending ROI and more. This type of software gives you a 30,000-foot view of how your asset is performing, so you can forecast future needs and address macro issues across your portfolio proactively rather than reactively.
There are several types of property operations technology solutions on the market, so you’ll have to do some research to find the one that’s the best fit for your needs. Here are some things to keep in mind when looking for a property operations technology.
1. Look For Reporting, Monitoring And Prediction Capabilities
Seeing into the future can help you make smart moves in terms of future value and revenue. Not all platforms offer future predictions, but these capabilities are too valuable to forgo. Make sure the system you’re considering can make predictions in areas you’ll need, like turnover, maintenance costs, capital expenses monitoring and reduction, etc. The right software will also give you good visibility on how your property managers are performing from a procurement and project implementation perspective.
2. Make Sure It Provides The Big Picture
As an asset manager, you need to see the big picture of how your asset is performing. Make sure the tech you’re considering integrates information from all areas of the asset, such as budgeting, historical data, maintenance, etc., into one system. That way, you can see the whole picture of your asset’s performance at once.
3. Ensure Alerts Are Part Of The System
One of the most useful aspects of property operations technology is its ability to alert you or your property manager to areas that need attention. Make sure you choose a system that will send an alert when important repair, maintenance and safety tasks need to be taken care of in a timely manner.
4. Make Sure It’s Easily Adoptable
Investing in new technology doesn’t produce ROI unless the property staff actually uses it. Ask to see a demo of the software before you buy to assess whether or not it is easy to use. Also, make sure the company you work with understands your business processes and is committed to the industry.
Technology Can Make Managing Multi-Family Assets Easier And Provide A Strategic Advantage
Property operations technology can help you keep a finger on the pulse of your multifamily assets, so you can make choices that help protect and build the asset’s value. Managing assets to ensure that they perform optimally and provide sustained returns requires constant attention. Like all professions requiring diligent oversight and timely decision making, the right tools make all the difference.