Multifamily Revenue Management: Tips, Challenges, and More
- DrizzleX
- Aug 5
- 11 min read
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 in the property management industry.
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 steadier 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 property management trends 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 or use a property management software to log usage patterns and spot areas where you might cut costs or fix waste.
Then, 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 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:
Multifamily Revenue Management: Common Issues
Managing pricing and revenue management for multifamily properties can feel like a never-ending puzzle. You’ve got rents, market shifts, tenant expectations, and rising costs pulling you in different directions.
Let’s talk about the common challenges and how to handle them without the stress.
Figuring Out the Right Rent Prices
Let’s be honest, setting rent is tricky. If you ask for too much, units stay empty. If it’s too low, you lose revenue opportunities.
Guessing doesn’t work anymore. The real estate industry now leans on revenue management software with dynamic pricing capabilities. These tools use real-time data and data-driven insights.
They look at competitor pricing, local events, seasonal trends, and upcoming lease expirations. They also track demand and leverage historical data to suggest optimal pricing.
This helps property owners use more effective pricing strategies and optimize revenue without the guesswork.
The Market May Change Overnight
One moment, there’s peak demand. A week later, leasing slows down.
In the real estate industry, it’s hard to keep up with changes unless you use tools built for pricing and revenue management. These systems help you monitor demand, track market shifts, and predict future demand.
By using data-driven insights, you can make better decisions ahead of time and avoid missing out on revenue enhancement or falling behind on revenue performance.
Competing With Nearby Properties
Other properties in your area are using advanced tools too. If they change rent prices and you don’t, you risk falling behind.
You don’t need to check their websites every day. Some software gives you real-time data on competitor pricing and local multifamily pricing trends. This helps you stay competitive and improve your pricing practices without extra work.
Keeping Tenants Happy and Staying Compliant
Raising rents helps with revenue optimization, but it can upset tenants if done the wrong way. You also have to follow local rules.
Be transparent with tenants. If you raise rents, explain the reasons. Point out things like higher utility costs, new services, or needed repairs. Also, make sure you follow all local laws to keep things smooth.
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”. 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.
AI Predictions
DrizzleX uses AI to predict how much water each unit might use for the rest of the current month and the next two months. These predictions are based on at least 12 months of past water data from each unit.
You can spot unusual patterns, plan for higher usage, and compare buildings. It’s a simple way to track water across your whole property, without guessing. Just open a unit’s chart to view its monthly forecast.
Catch silent leaks and reduce overuse without changing your plumbing. Get your DrizzleX quote today!
FAQs About Multifamily Revenue Management
What is revenue management in multifamily?
Revenue management in multifamily means using pricing and leasing strategies to increase rental income across your properties.
It helps property managers and owners adjust rent prices based on market demand, competitor pricing, and lease terms.
By using data analytics and revenue management software, they can make better pricing decisions to boost occupancy and maximize revenue.
What are the 5 steps in revenue management?
The five main steps in revenue management include collecting market data, analyzing historical data and market trends, using demand forecasting, setting pricing strategies, and monitoring performance to make real-time changes.
Multifamily property managers often rely on revenue management systems and software to automate these steps and adjust prices based on current market demand and future supply.
What are the 7 core principles of revenue management?
The seven core principles of revenue management include understanding market demand, segmenting your renters, forecasting demand, optimizing pricing, managing lease terms, maximizing occupancy, and making data-driven decisions.
These principles help multifamily revenue managers use dynamic pricing strategies and revenue management solutions to improve rental income and drive sustained profitability.
What are reba rates?
Reba rates refer to rent benchmarks that guide pricing decisions for new and renewal leases. They’re often set using data from revenue management systems that track competitor pricing, leasing data, and market analysis.
Property managers use these rates to offer competitive rent prices while also capturing the highest revenue potential for their multifamily portfolio.
