Impact of Marketing and Operations on NOI

Whether you’re renaming an older property or looking to rent out a new development, focusing on your marketing and property management efforts is an effective way to get the most out of your investment.

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However, there are differences between the two. While you can’t have one without the other, there may be times when you would like to invest more in one over the other to increase your chances of hitting the highest NOI. Here are some things to consider along the way.


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“It really depends on what asset class you’re in to break even in terms of how much you spend,” said Joshua Young, vice president of market rate operations for Clinton Management, the property management subsidiary of Douglaston Development. Multi-dwelling news. “If there is money spent on marketing and it creates a positive effect on revenue, there is a delicate balance in how it affects NOI.”

As an operator, you must have a thoughtful strategy to maintain high renewal rates and attract new residents. Sure, elaborate marketing tactics can attract new people, but that can’t take precedence over retaining the ones you already have.

It’s critical that businesses are revenue driven and constantly seek to identify unique strategies to increase asset value, said Gina Fortune-Harmon, vice president of property management for The Habitat Co. But the goal is also to manage costs without sacrificing anything. the resident’s experience.

The Habitat Co. manages nearly 100 properties, including Hubbard Place, a luxury rental community in Chicago’s River North neighborhood.

Management motivation

In order to determine where to invest your money the most in order to increase your NOI, it is important to look at the asset class you have and at what stage your property is: is it a new development, a value project added or renamed property? These are examples of communities that will have different strategies and require a greater focus on marketing or operations.

If you already own a relatively successful property with a positive retention rate and rental percentage, property management is where you might want to invest more of your money and time – and investing in your team is essential. to ensure proper operation. Hiring a diverse group of people with varying backgrounds will help you meet the ongoing needs of your current and potential residents.

“In the end, your on-site team is closest to the prospect and the resident; they are the face and voice of your property, ”said Chris Coleman, vice president of development for Wingspan Development Group. MHN. “A strong property manager can overcome weak marketing, but strong marketing will be wasted with a weak property management team.”


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In addition to your staff, involving residents in your operational efforts will make them feel included and will also help boost morale throughout the community. Allocating a portion of your budget for resident programming is a great way to meet their wants and needs on the property.

“I believe marketing to our current residents is where the most effective marketing spend lies,” said Tim Kramer, vice president and director of operations and management services at Draper and Kramer. “It takes a lot of effort to get the attention of someone looking at the whole market,” he noted, “but it’s relatively easy to do well by the people who already live in your area. property. “

Pre-rental began on Maple Street Lofts, a 192-unit luxury rental community developed by Wingspan Development Group in Mount Prospect, Ill., A northwest suburb of Chicago.
Pre-rental began on Maple Street Lofts, a 192-unit luxury rental community developed by Wingspan Development Group in Mount Prospect, Illinois, a northwest suburb of Chicago.

Improve your marketing tactics

If you’re redefining your branding, engaging in a community that needs a lot of work, or building from scratch, it will make more sense to focus on marketing the property.

“We have noticed from experience that our initial investment in building a brand and a sense of community is money well spent, and thus we get the best return,” said Young.

Specializing in grassroots developments, Young noted that it’s important to build a brand but not overdo it. “You can spend money to create that illusion, but you can’t lose sight of what’s going on on the ground,” he added.

When rebranding or implementing a value added strategy, marketing can help you identify your target demographic and how to reach them. It also strengthens your position in the market and helps create content that generates interest to increase occupancy and NOI.

“Marketing and customer service are closely intertwined… marketing adds value by creating a connection between people and the product,” noted Fortune-Harmon.

In order to get the most out of your marketing strategy, look for multi-faceted investment opportunities in partnerships or social media that will set your property apart from the competition. You can also include current residents in your marketing efforts, collecting feedback through surveys and allowing them to review the property and share the word.

“It’s a much more efficient expense than broadcasting a ‘live here’ message blindly, hoping for a response,” Kramer said. “Plus, there’s an added benefit when your residents enjoy living in your community: they become marketers and ambassadors. “

Soterra Blue offers residents one, two, and three bedroom floor plans and a range of amenities such as an expansive outdoor pool with a hot tub and lounge chairs.
Soterra Blue offers residents one, two, and three bedroom floor plans and a range of amenities such as an expansive outdoor pool with a hot tub and lounge chairs.

Key considerations

Reinforcing certain basic elements in your marketing and operational strategies will drive the growth of the NOI, no matter what type of community you are working in.

“Effective marketing is the spotlight that shines on your property so that the world will notice and decide to pay the rent,” added Coleman.

Marketing is key to communicating what your new community has to offer to potential tenants and to the neighborhood as a whole. But property management is vital to keeping your asset running from the ground up, with an emphasis on retaining current residents. The key factor in the confrontation between marketing and operations is the efficiency of spending.

It’s important that your staff understand the cost of marketing versus resident revenue, the number of new leads generated, and the ability to sign new leases. Both marketing and operations teams need to understand and track all of these in order to get results on your NOI.

If you feel like you’re not getting your money’s worth, you can change direction and experiment with new strategies. But keep in mind that spending more doesn’t necessarily mean you’ll get more, so start small and respond to one idea at a time to see what works best for your community and business goals.

“You can’t over-promise and under-deliver. You have to balance and back up what you put in there, ”Young said. “The consumer is highly educated, the market is transparent and people cannot be pressured into making decisions. It’s important to be smart about your message and how it’s delivered.

Read the June 2021 issue of MHN.

About William G.

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