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Hidden Line Items That Put You in the Red
Regardless of the year, budget season seldom serves as an anxiety-easer. After a financially challenging stretch, the cringe-factor is even higher. Thankfully, 2021 doesn’t have to be a repeat. Extra costs for cleaning and sanitation are no longer new and can be incorporated into the budget without the surprise factor. And many tech platforms earmarked for 2021 have already been rolled out ahead of time, so their costs have already been incorporated. Properties can concentrate on expenditures that offer the highest potential for reward in the form of resident satisfaction, which includes almost everything that caters to the work-from-home demographic, including co-working spaces, business centers and highly functioning printers.
Don’t Force Team Members to Quit in Order to Grow
While the multifamily industry prides itself as a place to grow, 2020 employee satisfaction surveys suggest room for improvement. According to the 2020 Swift Bunny Index, 15% of associates do not have a clear understanding of their current career or promotion path and 17% are unsure whether they do. Additionally, 16% say they are not notified of career-advancement opportunities within the company and another 25% are unsure whether they are notified of all opportunities. This provides the opportunity for multifamily leadership to make an increased effort to regularly talk with associates about their ambitions and to ensure proper communication about open positions.
Secure Package Management Plays Role in Resident Satisfaction
The meteoric rise of ecommerce has been well documented, but don’t expect it to level off any time soon. In fact, package volume in 2021 is projected to be as much as 30% higher than last year. Because in-person shopping has largely been replaced by clicking a button on the pages of Amazon and other retailers, residents often receive joy in the form of retrieving their packages. If that process becomes cumbersome or too convoluted, it will reflect on their overall living experience. That’s why outsourcing package management to a vendor with off-site storage facilities and the ability to deliver directly to residents has become a popular solution.
IN THE NEWS
CRE Needs Third Round of Stimulus Funds
A third round of stimulus funds would be fantastic for real estate, according to John Chang, senior vice president of commercial property company Marcus & Millichap. If it doesn’t happen, Chang believes there could be a relapse of economic weakening in Q2. “The second round of stimulus was late so we saw the economy soften,” he said. “It was also too small. Investors will need to monitor the progress of a third round of stimulus as a key indicator going forward.” Last year’s first stimulus was most effective, although it created a false sense of economic strength.
Why Class B Multifamily is Recession-Resilient
While the apartment industry as a whole has weathered the pandemic better than many others, Class-B communities have had the most success retaining business levels. While Class-A communities have struggled some with occupancy and rental rates, some of these also feature smaller floor plans in favor of large amenity spaces. With the amenities either shut down or limited, they are not as compelling to renters. On the flipside, Class-C communities still have high demand, but the demographic of renters who live at these communities has been disproportionately impacted by the pandemic. In the middle is Class B, which features a financially stable renter base that has kept up on payments.
Developers Increasing Apartment Home Sizes in Pandemic
Prior to the pandemic, sizes of apartment homes were trending downward. Renters were OK with sacrificing some personal space to live in the locales of their choice. But after a year spent largely at home, that trend is reversing. The buzzword “micro-units” will now take a backseat, as developers aim to incorporate larger layouts into their blueprints. Sean Caldwell, executive managing director for Mill Creek Residential, points out that studios and small one-bedroom homes typically perform well when demand is strongest. But in current times, apartment hunters can be a little more selective about their living spaces.