As multifamily investors and operators, we are constantly investigating pricing strategies to find the best and most efficient ways to achieve consistent returns. But what about owners who use multiple fee managers in different markets? The folks at New York-based Abacus Capital Group addressed their need for a pricing strategy across operating platforms by deploying a revenue management system.
“We believe it is most efficient to find local management with local expertise, and we don’t expect a single fee manager to understand every market either,” says Kyle Ellis, one of the managing partners of Abacus. “We’re perfectly comfortable working with several ‘best-in-class’ management firms across our portfolio.”
The first major issue is when multiple fee managers are used they all use different data and their own internal metrics and strategies.
The second problem with using multiple fee managers is inconsistent reporting. “When there are different types of reports coming in, on different schedules, it can be quite difficult to keep up with what’s really going on out there,” Ellis says. “What you want is a single, consistent, and methodical approach to pricing and an accurate and timely reporting solution that’s used by all managers.”
Abacus adopted a standardized pricing strategy by deploying RealPage’s Yieldstar revenue managemnent system to help eliminate many of the inconsistencies they were experiencing.
Revenue management systems for multifamily generate pricing based on several factors, including current and expected vacancies, projected demand, recent rental rates, amenities, lease term, move-in date and existing market dynamics. Optimized pricing can be achieved daily, which in turn will help operators generate more income and improved financial results.
Read more about the Abacus case and other Yieldstar case studies on optimized pricing here:
Multiple Fee Managers, One Revenue Management Solution
“Seven of eight properties using automated rate setting had better results than our control group setting rates manually,” said Scott Wilder, senior VP, property management for the Lincoln Property Company residential division (shown at left). “Our perception entering the test was that we would activate the ‘black box’ and it would do the thinking. We were encouraged how engaged our team became; by using LRO and contributing to our weekly pricing calls, they became more focused on rate setting and the factors that drive revenue.”
