Multifamily budget season is upon us! All over, multifamily communities and corporate teams are planning for their next year’s budgets and expenses – trying to anticipate and account for every dollar. But, while the planning is happening now, this budget will be in effect for a full calendar year. Meaning, the plans being set right now will still be in effect by this time next year and for 4 more months thereafter as well. This (along with cost cutting) may be one of the biggest reasons why budget season can be strife with stress. There’s a lot that rides on the decisions being made today! And by a lot, we mean your entire next year!
During property management budget planning, rather than focusing on what your team and community will need or wants yet this year, consider what you will need before the end of next year. Your budget planning needs to go well beyond your wants and needs though. You need to be thinking about your residents and prospective residents as well. What will they be wanting and needing? Will there be changes in where you need to reach them with your marketing? And how you need to reach them there? Will market changes impact your occupancy and require more aggressive marketing and leasing budgets?
While all things multifamily budget planning will vary greatly from property to property, team to team, and company to company, the mindset and considerations should all be similar in how they think ahead into the next year. So to help with this stressful time of year, we pulled together four top priorities to consider during multifamily budget time to help guide your thoughts and decisions on the year ahead.
Market Changes = Marketing Changes
When looking at your multifamily annual operating budget, know that changes in the market must be reflected by changes in the marketing. By that we mean, for example, does the community expect high turnover? If your property has a heavy student population or leases that all renew at the exact same time, you should expect heavier marketing leading up to certain months and seasons throughout the year.
When thinking about increased marketing efforts though, you can’t simply budget for doing the exact same thing you did this year. While it may have been effective multifamily marketing for 2019, that doesn’t mean it will be effective multifamily marketing in 2020. People change. Markets change. Platforms change. Consumer trends change. Google changes! There are so many factors to consider in your marketing efforts. While there is no magic formula to know exactly what will work best for 2020 multifamily marketing, start doing your research now. Read articles about marketing trends, consumer trends, and forecasts / predictions for what will stay strong, what may change, and what new is entering the space that could be relevant to you and your community.
Staffing & Maintenance Needs
When heading into multifamily budget season, make sure you’re accounting for staffing and maintenance needs that may come up. These often fall under typical property management expenses and, if you are stabilized, there may not be much of any change on the staffing front. If you are actively leasing up this year though and plan to stabilize in 2020, will you be decreasing your leasing staff and increasing your maintenance team? Consider all costs that come with that shift.
Is your community 8 or 9 years old and approaching that 10 year milestone? Consider what standard maintenance needs to happen next year and what may need to start being replaced. The big ticket items are likely already well planned for, but what about the little things that current and prospective residents absolutely notice? The paint on the trim being scuffed. The cracks and potholes in the sidewalks and parking lot. The worn look of the furniture in the clubhouse. All things that may not be top priorities, but are all an important consideration for ensuring your property shows well and continues to be a great place to live. Thinking ahead will mean you aren’t scrambling to find the funds last minute.
One area many multifamily marketing teams may not consider is upgrades in marketing technology. It’s not an if anymore in terms of technology changing – it’s how and when will technology change between now and next year? Are you ready for it? Technology is an ever evolving beast. You certainly don’t want to and can’t afford to be left behind with your multifamily marketing technology, leasing technology, or property management technology.
For example, many communities have video budgeted for their community, but have you considered do-it-yourself video that works for marketing, leasing, operations, maintenance, and more? While the video technology may change over time, year-over-year video is still maintaining its leading rank as a top marketing tool. If you are still thinking about video like you did in 2015, it’s time for an overhaul on your expectations of video and how it can impact all parts of your community and processes. It isn’t just video though. Is your team using an iPhone 7 or an iPad 3 for leasing? Might want to consider upgrading those to newer models to ensure your team is equipped with the latest and the greatest.
How to Stay Top-of-Mind
Finally, when planning for next year, think about how you’re going to stay top-of-mind in an increasingly competitive marketplace. Where do you need to invest in order to stay relevant with your marketing and reach your target audience? Is your audience still circling ads for apartments in the local newspaper? Likely not. More likely they are on social media, ILS’s, and searching online for a community that speaks to them.
Does your rental property budget for changing consumer demands? One of the biggest tips when it comes to staying top of mind with prospective residents is retargeting. Retargeting, also known as remarketing, is a way for your community to ‘stick with’ prospective residents that have bounced from your website and allows your brand to continue getting in front of them across the other websites they proceed to visit. Not sure that’s for you / your community? Budget season is the time to do your research and learn something new. Read up on the topic, ask others in your local apartment association about their experiences, and think about something new with your multifamily budget considerations.
While every community has different needs, the above tips are all things that every single multifamily professional can consider, do, and keep in mind while preparing their budgets for next year. If you take nothing else away from this, make sure that you are thinking critically about what you’ll need for next year and not just replicating exactly what you did this year. It’s a 12-month budget and a lot can and will change between now and the end of next year. Planning for what you’ll need next year is just as important as planning for what you’ll need in two months.
If you’d like to learn more about our experiences with multifamily budget seasons or would like to discuss how Realync’s video leasing solution could be a big time and money saver for your team next year, message us at firstname.lastname@example.org!
Until next time…keep it real!