How Much Data is Too Much? Finding Meaningful Multifamily Metrics

The question of “what’s the rent?” in multifamily has gotten more complex over the years. Establishing rent on distinctly different apartments is one thing and finding the sweet spot on comparative units is another. Today, many factors dictate the rent. Is it a new lease? Is it a renewal? What amenities are included? What time of year is the lease going to go in effect? How long is the lease? Other dynamics are involved beyond the four walls of the unit. “These are incredibly complex questions,” says RealPage Vice President of Asset Optimization and Deputy Chief Economist Jay Parsons. “We have introduced all of these complexities and something as simple as ‘what’s the rent?’ has become an incredibly complex question.” Data science based on lease transactions is easing that burden. Over the years, revenue management systems have taken a scientific approach to finding the right rent number based on what the market bears. Business intelligence is now digging deeper and unearthing many more metrics to gauge property operations. With so much information, finding the metrics that matter most can get bogged down in traditional reporting, however. At one point, the reporting ritual every Monday at BH Management was cumbersome because there was too much overlap and a lot to parse through. Management needed to dial it down. “We woke up one morning and realized we were sending 20-30 reports a week to the ops team,” said Brandy Daniel, BH Management’s Vice President of Business Intelligence. “It was too many reports for them to open, too much for them to go through, too much for them to even understand what was happening.” The wealth of reports had a trickle-down effect that, in some cases, delayed the company from taking appropriate actions by as much as a month. It ultimately affected BH Management’s performance the following month, Daniel said. After lengthy discussions abo...