Budgeting for revenue in 2017 could be a tricky task, as the market forecast is a bit murkier than in the past few years.
Some have expressed concerns that the apartment market will turn in 2017 and rent growth will stall. Others believe rent growth will continue to break industry records. No matter what actually happens, having data on your competitors could help you set a better revenue budget.
Most companies have no data or bad data on their competitors. So, they often turn to internal year-over-year numbers, ignoring how their competitors are performing.
Using year-over-year numbers for your own community provides a solid measure to assess your own growth. But that measure alone ignores how you stack up against others in your market. By only analyzing your own data, you’ll never know when a comparable is outperforming everyone in the market. You also might be doing better than you projected. Your growth, which you thought was weak, could have actually been one of the strongest in the submarket.
Either way, you might believe your 2016 performance was indicative of the market as a whole with nothing to compare it to. That could cause you to under- or over-forecast revenue for next year.
But just having data isn’t good enough. It has to be accurate and complete. Bad data based on poor survey techniques – or having managers call their comps for information – results in a bad budget. Garbage in, garbage out as the data hounds like to say.
The more accurate data you have on your comparables, the better your forecasting will be. And in a potentially fluctuating market, having that data is more important than ever.