If you manage a property, you probably already deal with rental rates, leases, and occupancy. But multifamily revenue management takes it a step further.
It’s all about using data to set the right rents, keep vacancies low, and bring in the most income possible. Instead of relying on guesses, you use real numbers and tools to make smart decisions.
In this article, we'll discuss multifamily revenue management, tips and strategies you can try, and more.
How Multifamily Revenue Management Works
Multifamily revenue management uses data and technology to help property managers set optimal rent prices for each apartment. Here's a simple breakdown:
Collecting data: The system gathers details like local market trends, apartment demand, vacant units, and prices at similar properties.
Analyzing demand: It checks how many people are looking for apartments, the types of units they prefer, and how quickly units are being rented.
Adjusting rent prices: Based on the data, the system recommends prices. High demand could mean higher rents, while low demand might call for lower prices to attract tenants.
Tracking occupancy: It monitors how full the building is. If too many units are empty, it adjusts prices or offers deals to fill them faster.
Benefits of Proper Multifamily Revenue Management
How can revenue management systems help your business? Let’s talk about why multifamily revenue management is worth the effort.
More Income Without Guesswork
One of the biggest perks is setting rents that match what tenants are willing to pay. You don’t have to second-guess or copy what your competitors are doing.
Tools like revenue management software allow you to use real numbers to decide what makes sense for your property. That means you charge the right rent without leaving money on the table.
Make Utility Costs Fair
If you’ve ever split a utility bill evenly across tenants, you know it’s not always fair. Some people use Ratio Utility Billing Systems (RUBS) to charge their tenants for their utility use.
But with technology, you can make more accurate billing for your tenants through submetering systems.
If you’re using submetering systems, you can charge tenants based on their actual usage. This way,
someone who uses much more water or electricity pays for it, not their neighbor. It’s fairer for everyone and helps you avoid paying out of pocket for overages.
Keep Units Full
Empty units cost you money, plain and simple. A well-made revenue management plan helps you avoid long vacancies by balancing pricing and occupancy.
For example, if demand drops during certain months, tools like dynamic pricing systems can adjust rents just enough to fill those units quickly. Fewer vacancies mean less stress and a more steady cash flow.
Stay One Step Ahead
With data analytics and forecasting tools, you can plan for changes before they happen.
Let’s say you see demand is expected to dip in the winter—knowing that ahead of time gives you a chance to adjust your strategy.
Whether it’s tweaking rents or offering specials, you’re in control instead of reacting last minute.
Revenue Management Strategies You Can Try Out Today
Let’s talk about some practical ways to improve your multifamily revenue management. These are simple strategies that can help you maximize revenue while keeping your tenants happy.
Pay Attention to Market Trends
The rental market doesn’t sit still. Prices change, demand goes up or down, and competitors adjust their rents. Staying on top of what’s happening helps you make better decisions.
Are rents rising in your area? Are people looking for specific amenities? Set aside some time each month to check what’s happening in your local market. A little research goes a long way.
Let the Data Guide You
Stop guessing when it comes to rents, occupancy, and utility expenses. Use your data to determine what’s working and where you’re losing money. For example, look at occupancy rates, lease expirations, and tenant renewal trends to make smarter decisions about pricing rent.
But don’t stop there—track your utility costs, too. You can set up submetering systems to track tenants' resource consumption habits. So you can see if you need to talk to your tenants about their usage and arrive at a solution to save resources.
Spread Out Lease Expirations
It’s stressful for property owners when too many lease agreements end at the same time. Suddenly, you’ve got multiple empty units, and it feels like a scramble to fill them.
Try spreading out lease expirations across the year. This way, you’re not overloaded during slower rental months.
Keep Tenants Happy
Happy tenants are more likely to stick around. Renewals save you money on turnover costs and keep your property full. Make sure your tenants feel heard and valued. Clear communication about rent changes or new policies goes a long way.
Be Smart About Utility Costs
Utility bills can feel like a black hole for your revenue if they’re not managed well. Using submetering systems lets property managers like you track and allocate costs fairly. This way, tenants pay for what they actually use, and you avoid covering overages out of pocket.
Tenants also tend to use water, gas, and electricity more responsibly when they’re billed directly for their usage.
But it’s not just about splitting costs—these devices can also help you spot problems early. For example, a water leak device and submetering systems can flag unusual water usage patterns.
These tools can find a leak and alert you before it turns into a massive expense. Fixing issues like this quickly helps keep your expenses down and protects your revenue.
Plan for Slow Times
Every property has slow seasons, and it’s better to prepare for them than panic when they happen. You can use forecasting tools to see when demand might drop and adjust your strategy ahead of time. Consider offering a small discount or a move-in special to attract renters during quieter months.
How to Implement a Multifamily Revenue Management Strategy
So, you’re ready to dive into multifamily revenue management, but where do you start? Don’t worry—it’s not as overwhelming as it sounds.
Start With Market Research
Before you make any changes, you need to understand the multifamily industry market. This means looking at:
Competitor pricing: What are similar properties charging for rent?
Demand trends: Are people actively looking for rentals in your area, or is the market slowing down?
Local factors: Are new developments or changes in the area affecting housing demand?
Analyze Your Property’s Operational Performance
Take a look at your property’s current numbers:
Occupancy rates: Are your units staying full, or do you have frequent vacancies?
Turnover costs: How much are you spending each time a unit turns over?
Lease expirations: Do they cluster around the same time or spread out evenly?
Utility costs: Are you tracking how much water, electricity, and gas are used? Are there leaks or inefficiencies that could be costing you money?
You can use data analytics tools like revenue management software, property management systems, or utility trackers to study data and even forecast demand.
These tools help you find patterns, fix problems, and make better decisions about rent, repairs, and leases. Tracking these numbers helps save money, fill units, and earn more profit.
Set Clear Goals and KPIs
What do you want your strategy to achieve? Whether maximizing revenue, reducing vacancies, or improving tenant retention, having clear goals helps you measure your success.
Some common KPIs to track include:
Revenue per available unit (RevPAU)
Occupancy rates
Renewal rates
Average rental rates
Tip: Focus on two to three key metrics first so you’re not overwhelmed.
Monitor and Refine Your Strategy
Revenue management isn’t “set it and forget it.” You need to keep an eye on how your strategy is performing and make changes as needed. Are your units staying full? Are rents increasing steadily? If not, tweak your approach.
You can schedule a monthly check-in to review performance and adjust where needed.
Communicate With Tenants
Clear communication is key when rolling out changes. If rents increase, explain why and how it benefits the property. For example, you might share that the increased revenue will go toward improved amenities or services.
Send personalized updates to tenants before implementing changes to avoid confusion or frustration.
Stay Flexible
Dynamic pricing is just a fancy way of saying you adjust rents based on demand. Dynamic pricing strategies mean you can raise rents when the market is hot.
When it slows down, you lower them just enough to stay competitive. Even small rent changes can make a big impact. Don’t be afraid to tweak prices regularly.
Multifamily Revenue Management Software
Managing your property is now much easier with the abundance of tools and software made just for this purpose. These can include:
Revenue Management Software
Multifamily property management becomes a lot easier with tools built specifically to help you adjust rents and keep up with the market. They analyze data like supply, demand, and your property’s performance, then recommend or even set rent prices for you.
Property Management Systems (PMS)
If you’re tired of juggling spreadsheets, these systems are a godsend. They also work best if paired with a property management system. They keep track of leases, tenant payments, maintenance, and more—all in one place.
Most revenue management tools work best when paired with a property management system. These systems track leases, payments, and tenant info, so everything is in one place.
Utility Submetering and Cost Management Tools
Keeping track of utility costs can be a headache, right? Submetering lets you measure exactly how much water, gas, or electricity each tenant uses. That way, you’re not just splitting the bill evenly—you’re charging tenants for what they actually use.
Submetering can also help you avoid additional maintenance costs by catching possible leaks that waste resources. For example, if you install a water leak device, you can be alerted if a tenant has a leaky toilet and address it promptly.
Case Study: How Water Submetering Cut Costs and Consumption in Decatur, GA
We’ve done a case study for a property in Decatur, GA, to see how much a reliable water submetering system can save on utility costs. The property introduced DrizzleX’s water submetering on toilets only to its 192 units, serving 384 tenants.
Over just four months, the results were remarkable. This system led to a 43% savings in water costs, amounting to a total savings of $49,539!
Here’s a simple visual breakdown of the stats:
Want to see how our submetering solutions can benefit your property? Get a quote today and see how much you can save!
Multifamily Revenue Management: Common Issues
Managing revenue for multifamily properties can feel like a never-ending puzzle. You’ve got rents, market conditions, tenant expectations, and costs pulling you in different directions.
Let’s talk about the common challenges—and some ways to tackle them without losing your mind.
Figuring Out the Right Rent Prices
Let’s be real—setting rental rates is tough. You don’t want to charge too much and end up with empty units. But if you charge too little, you’re leaving money on the table.
Guessing doesn’t work anymore. Try using revenue management software. It looks at things like what your competitors are charging, how much demand there is, and even trends in your area. Then it suggests rent prices that make sense.
The Market May Change Overnight
One minute, there’s high demand, and you can barely keep up. The next, it feels like no one is renting. Keeping track of current market conditions is exhausting, especially if you don’t have the tools to predict what’s coming next.
You don’t have to guess here. Tools with data analytics can track market trends for you. Some even predict when demand will go up or down, so you can adjust before things shift.
Competing With Nearby Properties
Your competitors aren’t sitting still. If they adjust their rental rates and you don’t, you risk losing tenants. But how do you know what they’re charging without spending hours digging for data? This is where real-time insights become your best friend.
There are tools that can keep an eye on what your competitors are doing. They’ll show you what others are charging so you can adjust if needed.
Keeping Tenants Happy and Staying Compliant
Raising rents might be good for revenue, but it’s not always great for tenant relationships. You also have to deal with local regulations and make sure you’re following the rules.
Be transparent with tenants. If you need to increase rents, show them why—like rising maintenance or utility costs. It helps them see it’s not just about profits. Also, make sure you’re up to date on local regulations so you’re always in compliance.
How DrizzleX Can Help You With Multifamily Revenue Management
DrizzleX allows you to detect hidden leaks, such as running toilets and leaky faucets, to stop water waste each year. It also alerts you to excessive water overuse by tenants.
Typically, buildings that use DrizzleX reduce their water bills by 25-45% or more. This means less money is spent on utility costs, and more goes to your wallet.
And you can expect a pretty quick return on investment (ROI). Buildings with DrizzleX save enough water to cover the entire cost of DrizzleX within about 9 months on average. You can get a free quote and see how it can increase your revenue today!
Usage Reports
One of DrizzleX's solutions is the “Water Consumption Insights Report” report. Since many people aren't really aware of their excessive water usage, an accurate report can be very helpful in preventing unnecessary expenses. Using the reports, you can communicate with your tenants about their water consumption habits, and back it up with precise data too.
Leak Detection
Leaks can be sneaky because they aren't always visible. With property inspection, you can see the obvious ones. But, silent leaks will only show up on your utility bills. DrizzleX gives you water control because you can monitor the water flow in your building.
The system will notify you about where and how much water is being lost.
E-mail Notifications
Once DrizzleX spots the leak, it will notify you via email. The message you receive will include all the details about the exact apartment and fixture that is the culprit, how many gallons were used, how much it will cost you if the problem isn’t fixed, and even possible causes for the water waste and how to fix it.
Billing
DrizzleX also allows you to bill your tenants. Tenants conserve water when they are the ones paying for it. You can easily create water bills based on accurate water consumption and bill them fairly.
FAQs About Multifamily Revenue Management
What is revenue management in multifamily?
It’s the process of setting the best rental rates and managing occupancy to maximize income for multifamily properties.
What are the 5 steps of revenue management?
The five steps are analyzing data, forecasting demand, setting pricing strategies, monitoring market conditions, and adjusting rents to optimize revenue.
What do you mean by revenue management?
Revenue management means using data and strategies to balance pricing, demand, and occupancy to increase overall income.
What is a multifamily pricing strategy?
It’s a plan for setting rents based on factors like market demand, competitor pricing, and property performance to attract tenants and maximize revenue.
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