The rising tide of high interest rates is reshaping the real estate rental investment market, creating an imperative for multifamily (MF) and single family rental (SFR) executives to inspect their strategies and navigate the current market environment carefully.
Shifting From Growth to Efficiency
The current economic climate is making borrowing more expensive and capital-intensive projects and acquisitions less feasible. The high cost of capital, combined with very competitive rental markets, has driven MF and SFR owners and third party property managers to reexamine where they allocate their resources and shift investment to solutions that streamline operations, drive cost savings to the bottom line and improve resident experience and retention. Many of these investments are in technology solutions that can help centralize and automate various operational processes.
Improving Maintenance Process to Drive Cost Efficiencies
Most MF and SFR operators have realized that improving maintenance processes is an easy win that can deliver multiple benefits very quickly. The obvious benefit is increasing staff and vendor efficiencies, paired with the ability to negotiate better product and service contracts, in order to drive cost savings and more profit to the bottom line. Mid-sized and large-scale MF and SFR operators can see tens of thousands to hundreds of thousands of maintenance requests per year. Even a 10% savings on maintenance operations can drive millions of dollars to the bottom line. One of FailGo’s largest customers, FirstKey Homes, saw a 17% reduction in maintenance costs in the first year of deployment as shown in this case study. This level of cost savings in year one is especially impressive in a time of significant inflation and indicates a rapid payback on software investment. Many FacilGo customers see up to a 35% savings after deployment.
Benefits Beyond Cost Savings: Resident Satisfaction and Retention
Improved maintenance operations provide multiple benefits beyond cost savings, including improving the resident experience. A satisfied resident is more likely to renew their lease and recommend the property to others. In an age where online ratings can make or break a property’s reputation, this is a key strategic advantage. For example, the ability for residents to monitor the status of their requests and keep track of associated communications in real-time delivers complete transparency and fosters trust with the maintenance staff. By reducing human error, reducing costly mistakes and resolving maintenance issues on the first visit, the maintenance team conveys competency and professionalism.
By the same token, a streamlined and automated maintenance process also makes staff more efficient and improves staff satisfaction. Helping staff deliver a great experience so residents are happy and not frustrated improves staff morale. Eliminating mundane paperwork and providing a system that empowers staff to focus on delivering better services to residents is a win-win for everyone. All of this combines to increase staff satisfaction which helps retain existing staff and reduce the costs of recruiting and training new staff.
These systems can also improve efficiency for maintenance leadership, including executives and maintenance managers. Executives are empowered with normalized data displayed in easy to digest and dashboards which measure team performance and work order resolution rates across markets. Maintenance managers can leverage smart scheduling and routing to efficiently schedule staff with the right skills for the job. They can also ensure they have the right parts and efficiently route them from residence to residence to minimize travel time. Thus, instead of spending the majority of their time tactically triaging schedules, maintenance managers can now spend more time on strategies to improve the overall maintenance process.
Tightening up Warranty and Insurance Claims
One natural benefit from maintenance automation is the ability to improve and tighten both the insurance and warranty claims. As highlighted in the blog How Maintenance Software Can Streamline Insurance Claims, improving these processes can help SF and MFR operators minimize delays, enhance customer satisfaction, and ensure a smooth experience for residents, insurers and manufacturers.
The financial impact of delayed, inaccurate or missed insurance or warranty claims can be substantial. In a way, ensuring a tighter insurance and warranty claims process is “found money” that can flow directly to the bottom line.
Leveraging Technology to Unlock Maintenance Operational Efficiency
At the heart of improving operational efficiency is a software solution that centralizes and automates maintenance processes.
What are some of the key attributes of a well designed solution?
- An enterprise-grade and cloud-based platform approach with full SOC 2 compliance that smoothly and securely scales from hundreds of doors to tens of thousands of doors.
- A platform that includes a transaction engine that tags and tracks every step in the maintenance workflow and passes data to inform the next step in the process, including work order creation, scheduling, communications, procurement, inventory and more.
- Leverages AI to help guide maintenance staff through each step in the process, virtually eliminating manual steps and human errors.
- Provides a rich set of application programming interfaces (APIs) that can flexibly map to the processes of the operator versus requiring a change to the vendor’s process.
- Offers a mobile app that enables maintenance staff and vendors to step through the process and progress work orders from the field with accompanying pictures, even when internet service is poorly connected or disconnected.
- Has access to a large online marketplace of rated product and service provider vendors to reduce the time maintenance staff has to spend finding qualified vendors.
- Incorporates an asset and inventory management capability to ensure that products are taken out of warehouse inventory first and only approved products are procured.
- Provides rich, configurable dashboards that quickly convey insights to maintenance leadership regarding work order completion rates, team performance across the portfolio and other data critical to decision making, spend control and process improvement.
Future-Proofing for the Long Term
High interest rates are a phase and will eventually come back down to earth, allowing MF and SFR owners and operators to shift back to growth. The good news is that by taking the opportunity now to invest in automation, particularly around maintenance operations, operators are making a strategic investment that will have long term benefits. These automated systems, when architectured thoughtfully from the start, are scalable and flexible to scale with and adapt to MF and SFR growth and process optimization. This ensures these enterprises are always able to drive for continuous improvement. The software solutions themselves also improve over time, delivering more and more value. For example, systems that offer their own data warehouse can feed anonymized and normalized data into rapidly improving AI models to more accurately predict potential maintenance problems early, resulting in fewer disruptions and an overall smoother living experience.
Summary
High interest rates and a competitive market are certainly a challenge but need not be a setback for MF and SFR companies. By placing a focus on automating maintenance operations, these firms can achieve unparalleled operational efficiencies, elevate resident satisfaction, and lay down robust pillars for the future. Once the investment is made, the software solution will continue to improve, the maintenance team will get more comfortable leveraging the application and the savings will continue to increase. At some point the savings percentage will become asymptotic but at that point peak efficiency will have been reached and can be maintained for years to come. The path forward for the astute C-level leader, maintenance executive, or IT visionary is unmistakable: Automation in maintenance operations isn’t just advisable – it’s indispensable.
If you would like to see how FacilGo Maintenance and Maintenance Plus can help you lower costs, improve resident and staff satisfaction, and tighten insurance and warranty claims, contact us and we’ll set up time for a discussion and demo.
