Multi Housing News August 2012 : Page 41
take into account all variables, but a sys-tem like this can calculate all the variables, and does so every single day, calculating every possible option for all units.” Revenue management results in fl ex-ibility for associates at the property level, says Andrew Rains, executive managing director of the multifamily business unit at Rainmaker LRO in Alpharetta, Ga. Tools like LRO give “more fl exibility in [associ-ates’] ability to say ’yes’ to the prospects,” he says. “Because the prices change on a daily basis, it creates a gentle sense of urgency during their conversations with prospects to get the deal done sooner rather than later.” Lee Montgomery, Denver-based vice president of revenue management and industry principal at Santa Barbara, Calif.-based Yardi Systems, whose revenue management product is RENTmaximizer, echoes that assessment. “The property-level operations team feels they now have more variables to present, and it takes friction out of the process at the point of sale,” he says. “It gives them multiple price points to pres-ent to prospects … [giving prospects] fl exibility in pricing and unit, depending on move-in and move-out dates.” Beyond the upsides of higher rent growth and greater fl exibility, revenue management also improves operational processes, Montgomery says. “It consolidates all your revenue infor-mation in one place, for review by the ap-propriate personnel, as opposed to being all over the place. And opposed to being opinion-based, it’s now data-driven to al-low for data-driven decisions.” What’s ahead for revenue management? Experts in revenue management hold an array of views about what the future holds. Rains is among many who believe revenue management will increasingly be used in mobile applications to allow property-level employees to pull up timely pricing information right on their mobile phones and tablets. He also foresees online communities and social media driving the development of large data warehouses, whose market data property managers will be able to use to better meet consumers’ needs and wants. “There will also be the ability of property management companies to benchmark their performance in real time against their competitors,” Rains says. Lefkovits expects revenue management users and consultants to begin examin-ing a number of fresh initiatives during the coming years. For instance, he expects users to look for arbitrage opportunities in renting apart-ments for different purposes. “If the rents for single-occupancy offi ces in the area are twice the rents for studios, we’ll see owners renting those units to solo practice lawyers, consultants and fi nancial plan-ners who can’t work from home and don’t want to go into the center city,” he predicts. He also expects to see revenue manage-ment used to “identify smaller properties whose rents are low relative to market in order to fi nd opportunities to buy, re-ten-ant and fl ip smaller properties,” he says. “A REIT may not want to own a 30-unit building, but it could re-position and sell one for decent fee income if there’s noth-ing else going on.” Based on the last two industry technol-ogy conferences he’s attended, Yardi’s Montgomery foresees property manage-ment companies using revenue manage-ment processes to gain data on other parts of their operations. “Delivering that data in a digestible format to property management and making it real, alive and timely is an exciting next step,” he comments. “It will become not just a pricing tool, but also an informational tool to help drive the other aspects of the business and leverage other data sets. MHN To comment on this story, e-mail Diana Mosher at dmosher@multi-housingnews.com Are you connected? Join our online community. Find us, follow us, join us! www.facebook.com/MHNonFB TM twitter.com/mhnonline Multi-Housing News Forum www.multi-housingnews.com | August 2012 41
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