Insight #3: Adjust the Recipe for Your Operational “Secret Sauce”

By: Jay Parsons, Andrew Bowen and Tracy Saffos In the property management business, almost everyone has what they call “secret sauce,” and they take a lot of pride in it – rightfully so. A lot went into building those strategies. But sometimes, pride of ownership and past success can leave us unwilling to change the secret sauce when conditions around us change. The top-performing operators are skilled at walking the tightrope of staying true to their core principles while adapting their methods to a changing environment. Easier said than done, right? How should apartment operators walk that tightrope – and what KPIs or metrics should they use to help drive a successful strategy in the highly variable environment of 2021? Listen to the podcast on this topic. 2 All-Too-Common Mistakes Many property managers who joined the industry during the last decade experienced only “good times” until 2020. Experience isn’t everything, but it certainly helps. Lost lessons of past downturns mean potentially repeating our predecessors’ same mistakes. One common mistake of 2008-2009: Do nothing. A more positive way to spin that strategy is to say: “Let the dust settle” or “let’s wait it out.” If you’re the last to react, you’ll likely to take an occupancy hit as faster-acting competitors move to capture an outsized share of the limited demand pool. An even more common mistake: Do too much. One tried-and-true method of overreacting is to tether your property to its comps. Your competitors offer big rent cuts or massive concessions, so you feel pressured to do the same. If you overreact, you will damage your rent roll in a way that inhibits your ability to recover quickly when conditions improve. 3 Popular KPIs to Downplay Market Rent: It’s probably the single most leveraged KPI yet also unquestionably the single most misleading and potentially most damaging. At best, market...