With occupancy on the rise throughout the nation, apartment rental rates are approaching record highs. In order to maximize the monthly NOI in these positive market conditions, more and more owners and management companies have started using revenue management software, such as Rainmaker and Yieldstar. Revenue management takes into account availability, recent lease prices and market conditions to determine the best pricing options for each apartment. This very same system has long been used for booking airline tickets, hotels and car rentals, which is evident if you have ever tried to purchase any of these three items during the holidays.
In addition to the monetary benefit of maximizing rents, there are site level benefits that can be leveraged by your staff and help the prospects as well.
- Leasing consultants are empowered to negotiate pricing options with the prospects without having to check with the manager. This ability stems from the manager preapproving the pricing options consistently sent over from the revenue management representative, which enables the leasing consultant to know what exactly they have to offer at the beginning of each day.
- By having a pricing matrix, monthly concessions become obsolete and allow for the leasing consultants to be able to offer different rental amounts dependent upon the prospects flexibility. Also, the rental prices are revenue neutral, so the leasing consultant is not incentivized to sway the prospect into signing a longer lease term.
- There are a variety of pricing options based upon the flexibility the prospects have with their lease term length. This in turn allows for the leasing consultant to find the best apartments that fits the prospects needs in not only lease term length but also in desired rental amount.
- Marketing pieces that are created for the community are able to be designed without the use of any special rental amounts, or highlighted concessions.
- From a follow-up standpoint, the leasing consultants will be able to create more urgency and will also be able to provide updated pricing information for the prospects apartment they were interested in. Having this constant feed of updated pricing information will also help to make the leasing consultants be more proactive in their follow-up.
Revenue management software is a great addition to any community, regardless of if your occupancy is at 80%, or 99%. Using this software ensures that your community’s NOI is at its peak amount each month and takes the hassle of having to worry about effectively pricing your apartments as your occupancy changes. Even though the software will require the on-site team to be more diligent each day in learning their prospects needs and learning their pricing matrix, the benefit of being able to provide the best option to each prospect, will ultimately lead to more leases.