In 2022, apartment rental market size exceeded $229 billion when measured by revenue in the IBISWorld US Industry Report. With nearly 22 million apartment units in the United States today, multifamily professionals are asking, how will it change in the next year?
With this guide, you'll learn about ten key trends that will affect your business. You'll also see how these trends can be used to your advantage and help multifamily teams succeed. By considering these trends, you'll have an edge over competition while gaining a better understanding of the future of multifamily housing in 2023 and beyond.
2023's Top 10 Trends
The future of multifamily is all about centralization. The industry is moving toward a centralized model where fewer staff members handle leasing, maintenance, and other services. Even as the economy decelerates, strong demand of rental property will support revenues only if communities understand how to synthesize their labor.
According to Zillow, "56% of renters currently pay rent online, with 69% saying they’d prefer to pay online." If your residents are still paying with archaic paper checks or cash, it could create even more backlog in 2023, as systems continue to optimize through centralization.
Centralization allows property teams to cut costs while increasing efficiency, quality, and integration of technology. In the next year, no other form of centralization will continue to grow as quickly as proptech. Growth and tech competence will make or break multifamily communities in the near future, no matter the location, because residents will continue to expect more from their rental units.
There are many benefits to adding automation to your multifamily properties, including increased efficiency and eliminating human error. Automation allows for tasks to be completed at a much faster pace than manual labor. Complete more work in less time and increase profits by reducing the amount of time spent on mundane tasks that don't require the human touch. Save your personnel for the most important tasks, so they no longer waste their time and energy on what a simple automation can do.
Consolidation of vendors is a trend we've seen across industries, and it's one that is likely to continue. It saves money and time, reduces complexity of integrations, and creates a seamless tech stack.
In today's world, there are so many services available for multifamily teams that it can be difficult for any single operator to manage all systems, especially when they're spread across multiple applications.
Consolidation means bringing all your technology needs under one roof and using a single provider as your tech stack partner—eliminating redundancy in technology while increasing labor agility and accountability along the way.
The problem with consolidation is that it’s not always easy to find a single vendor who can deliver everything you need. Most companies are forced to work with multiple providers for different tech needs, which creates problems like integration challenges and nonessential systems that don’t talk to each other.
Elevated Living is the single vendor that does it all, from tech stack integrations to app build-outs that incorporate any preferences your community currently uses or would like to add in 2023. Our goal is to help your multifamily team work faster, smarter and more efficiently by having one vendor that can deliver everything you need.
7. New Job Roles
Resident retention and satisfaction are key to success. Consider a new position within your company dedicated solely to resident needs and concerns.
A “Resident Success Manager” or “Customer Experience Center” is the cultivated experience expert that connects with residents on a more personal level. With this job role comes an increase in responsibility for the overall quality of life at your community, so it's important that it's filled by someone who understands what makes people tick and how they interact with each other and their neighbors or community.
It’s also important to have a centralized customer support team that can assist residents in resolving issues and complaints. This helps reduce the burden to onsite teams and ensures that residents always have someone they can turn to when they need help. If property teams are having trouble keeping up with resident requests and issues, then it may be time to look into adding more staff or outsourcing some of these responsibilities.
If you are able to resolve issues quickly and effectively, trust between your team and residents will be consistent.
As a property manager, it’s important that you create an environment where residents feel comfortable coming to you with their issues. This will be especially true if you have a Resident Success Manager or Customer Experience Center who is dedicated solely to resident needs in 2023.
6. Outsourced Labor
You’re probably familiar with outsourcing, in which a company contracts another business to perform a service or complete a project. This is an increasingly popular option for multifamily developers and operators, who might outsource labor to reduce costs, liabilities and risk related to the operation of their properties.
Outsourcing labor can enable you to increase efficiency by freeing up your employees' time so they can focus on other tasks. It can also help you scale up your operations by hiring skilled workers who are already in the area or have experience managing properties like yours.
Contracted workers are often more flexible than permanent staff as well—they might be able to work longer hours if necessary or take vacations without causing scheduling issues. In addition, contracted workers tend to be more productive because they're incentivized by performance-based pay rather than meeting time-based goals set by management teams that may not understand how multifamily properties operate.
If you’re looking for a way to streamline your property management, contracting out is an excellent option. It can save time and money, as well as provide additional benefits that you don't have the resources to provide on your own.
5. Increased Revenue From Ancillary Services
As a multifamily owner, you want to maximize the revenue from your property. In 2023, there will be a number of ways to do that. Introduce new services that complement the existing ones on your property. For example, if your community has a pool or fitness center, consider adding housekeeping or maintenance services at an additional fee.
Increase revenue from existing services by offering them during off-peak hours when demand is lower but staffing costs remain high (for example, cleaning after midnight). This can also help attract more residents who are interested in these services but don't want to pay full price during peak hours because they're not using them as much as other residents are.
Another option is to introduce new amenities that residents can't get anywhere else, like community-branded excursions or building-wide parties. Increase revenue by adding amenities such as dog grooming, recording studios, or maker rooms to increase the value of each unit in your community to a broader spectrum of potential residents.
4. Hybrid Onsite Schedule
Hybrid schedules are a way of working to reduce costs while increasing service level. This is achieved by limiting hires, which in turn reduces the amount of money spent on salaries and benefits. By staggering shifts, you can have one person start late or leave early so that the next shift can begin on time.
For example, if you have two shifts per day (morning and evening), you could stagger them so that each shift gets one full eight-hour day off every week instead of working six days straight as they would if they were scheduled together.
If you have a large multifamily property, it’s a good idea to use a staggered schedule method. Some of the team will be scheduled to work in the morning, others in the afternoon and evening. More coverage during peak hours means fewer vacancies at any given time - and by extension, less turnover or no additional costs.
The same is true of large commercial properties. For example, sending out maintenance requests for 500 units at once creates a backlog for property teams. Instead, stagger the requests so that some go out on Monday morning while others go out later in the day or throughout the week. Set your team up for success right from the start a staggered schedule for both communications and onsite assistance.
3. Insights And Data
Data is a key component of the multifamily digital transformation. The industry has access to more data than ever before—and it’s being used to make better decisions at a portfolio level as well as on an individual property level.
From resident surveys and social media monitoring to building code inspections, there are countless ways that you can gather meaningful insights about your community. Confidently guide operations or make any necessary changes for greater efficiency or profitability with better insights.
Data is also the foundation for predictive analytics, which is critical for maximizing your portfolios’ performance. Predictive analytics can help predict resident turnover rates and vacancies, as well as help identify units that are at risk of damage from wear and tear or vandalism. It can also be used to evaluate how well you’re running your business on a daily basis—allowing property managers to respond quickly when problems arise.
“Trends vary by region, by state, and by municipality and may stray significantly from national averages. A program that regularly polls prospects and solicits resident feedback is essential to successfully meet renter preferences and expectations.” -Kendall Pretzer, CEO of Grace Hill, NMHC
The future is going to be even more data-driven. As we move into an era of artificial intelligence and machine learning, your property team will be able to leverage technology that’s more capable than ever before. If you haven’t already started using data analytics and predictive modeling in your multifamily management strategy, 2023 is the time to start.
2. Social-Worthy Physical Amenities
When people think of physical amenities, they tend to focus on the big-ticket items like pools, parking garages and fitness centers. But flipping through Instagram and seeing a photo of your apartment building's lobby that looks like the inside of a 5-star resort is just as important.
Imagine secret doors that lead into a club room, allowing residents to reserve an exclusive time slot just for their guests. We've seen it all on social media, from fireplaces that lead into billiard rooms to bookcases that open up to chef kitchens. Anything is possible when you're thinking outside the typical amenities aesthetic.
Get social outside, even if it's a simple designated space that captures sunrises or sunsets just right. Consider your location and opportunities for interior and exterior murals or wall art that create a community-wide vibe. Flaunt architecture or water features that can be enhanced with lighting, plants, wallpaper, or accessories. Build your community brand with a personalized space that's recognizable on social media and in real time.
The best way to create memorable experiences for residents is by giving them something they didn't even know they wanted until you gave it to them—and now they can't live without it! This is especially true when it comes to creating memorable experiences for guests of residents or pre-lease tours. Don't leave social media reviews and videos to chance; give your residents and guests a reason to pull out their phone and brag about your community on the social channels they love.
1. Economic Flexibility
The cost of living is continuing to rise, and so are the costs associated with running a multifamily community. Labor, goods and services, utilities—the ability to be flexible in your approach and adapt quickly as market conditions change will be critical for success moving forward.
Contracts with vendors can be renegotiated based on current market conditions. If your existing contract is out of date, it’s time to re-evaluate and find a new operator that offers terms in line with current market conditions.
If your current vendors are not willing to renegotiate your contract based on new information about costs, supply/demand and other factors that affect pricing, it's time to find a partner that will.
One of the biggest challenges for multifamily owners is being able to adapt to changing market conditions. You have to be able to determine if the rent you are charging is the right price or if it’s too high or low. You must know what residents in your location are paying for units similar in size, ensuring that your community is comparable in terms of quality or features.
"Nationwide, the median rental is projected to increase 6.3% in price, even as an influx of new multifamily housing helps to better meet rental demand." -Danielle Hale, Realtor.com chief economist, Forbes
An additional challenge is being able to renegotiate contracts with vendors and service providers when their costs increase due to inflationary pressures on labor (which often happens during recessions), imported goods and services (think tariffs), or energy costs. With Elevated Living as your tech product or labor services partner, you know you're getting the best rates on the market.
A level-headed multifamily manager will have a solid understanding of the local market and can use this knowledge to make sound business decisions. Understand what your potential residents are looking for in an apartment home, why they are making certain decisions based on their budget, lifestyle preferences or priorities. Finally, learn how you can provide them with products and services that meet those needs while still turning a profit.
While there are plenty of exciting trends to be aware of, it is important to remember that all these changes will not happen overnight. As technology advances and more people adopt new habits, we can expect to see more multifamily properties using automation and outsourcing labor in their daily operations.
It’s also worth noting that while some of these trends may seem like they are only relevant for larger portfolios, they could actually be applicable even at smaller scale if implemented correctly. The key takeaway here is that you should always be thinking about how your company can adapt its processes as time goes on - no matter how small or insignificant an idea might seem at first glance.
Think of the ways in which your business can benefit from these trends. How will they impact your marketing strategy and how will you adapt? It’s not enough to just read about these trends—you need to hop on board and actively work toward implementing them into your multifamily property management business.
What else could we include for our readers? Let us know below in the comments.