Summer is coming to an end. Busy leasing season has peaked and the flood of leads may be starting to taper off into a more manageable stream. Now is the time to begin the next phase in the property management year – budgeting.
While strategies may shift slightly from property to property, there are a few universal truths when it comes to budget creation. The overarching goal in nearly all cases is to operate more efficiently while increasing revenue. But to do so, you must start by identifying and aligning your efforts with your company’s strategic goals.
Here are four tips that can help lay the foundation for your budget for the upcoming year.
- Identify your strategic goals. Now that you’ve gone through most or all of busy leasing season, you can estimate your occupancy trends for the next year. Whether you’re in a situation where you are facing vacancies or you are in a place of high occupancy, you can formulate a plan for what your budget will need over the next 12 months. Don’t forget to look not only at your own community’s trends but also at local and national trends in the multifamily industry. According to a recent report from the Joint Center for Housing Studies of Harvard University, occupancy rates are increasing across the board, although 2016 represented a “sharp deceleration” in growth from the past two years. Finally, keep an eye on economic trends, as the national outlook for housing as a whole can have an effect on everything from your occupancy rates to costs of materials and maintenance.
- Review your communities’ operational needs over the past year and use them to forecast what you may require for the upcoming year. Drill down into the line items that did or did not give you the best ROI, and see where you can make cuts or make changes. Don’t forget to factor in any upcoming large maintenance projects that you may need to undertake over the upcoming year.
- Determine and target your ideal renter population for marketing purposes. Are you reaching the right renter market for your community? Are your current advertising channels working? Is it time to rethink your marketing strategy or reappropriate your marketing budget? Be sure to keep in mind the entire renter journey, from search to lease, before making any dramatic cuts.
- Set meetings with vendors. These can include your current vendor roster as well as potential new vendors. Take into consideration everything from HVAC maintenance and carpet cleaning – your operational vendors – to advertising and design – your marketing vendors. Now is the time to gather quotes and to evaluate your ROI. Whether you negotiate new terms, renew an existing contract or choose a new vendor entirely, your decision will directly affect your bottom line.
Need more help creating a budget for your multifamily community? Check out our free ebook, “Multifamily Marketing: Leveraging Strategy to Drive Your Budget Planning Success,” and our interactive toolkit for more information.