Using Data to Make Smart Property Management Decisions

As a property manager, one of your main responsibilities is to make informed choices that positively affect your company. While some decision-making may be intuitive, to accomplish this goal, you must determine which key performance indicators (KPI) are necessary for success and how to leverage that data.

Benefits of Data-Driven Decisions

Before we delve into which KPIs are important in property management, it’s helpful to understand the benefits of using real-time data to make business decisions. Having a gut feeling about a situation is certainly one way to determine a course of action; however, using good data to inform your decision-making process can help ensure you’re making the right choice instead of just assuming that you are.

Data-driven decision-making is the process of using data and analysis instead of intuition to reach decisions. By collecting, analyzing and interpreting data, you can make informed choices that align with the goals and objectives of your business. Data sources typically consist of customer feedback, market trends, and financial records.

The benefits of data-driven decision-making are numerous:

• Confident decision-making: Since data tends to be logical and concrete, as opposed to subjective in nature, you can confidently reach conclusions because you have facts to back them up.
• Proactive behavior: Analyzing data enables you to be more proactive in identifying opportunities for improvement or detecting potential challenges before they occur.
• Cost savings: Data empowers you to identify initiatives that decrease expenses and improve operational efficiency for your business.
• Resident satisfaction and retention: It’s crucial to understand what your tenants need from your operation. Conducting surveys and examining renter feedback logged in your Rent Manager History/Notes can provide insight that enables you to increase overall satisfaction and improve retention rates in the future.
• Strategic planning: By digging into all your data sources, you and your team can create and execute long-term business strategies for continuous growth and higher profitability.

Top KPIs To Consider for Property Management

While there are many KPIs you can measure to determine growth and success, here are some important indicators to consider for property management:

• Occupancy rate: The percentage of units that are currently filled—to calculate, divide the number of occupied units by the total number of units and multiply the result by 100.
• Tenant turnover rate: The percentage of residents who move out of a property over a specific period of time—to calculate, divide the number of tenants who moved out during a given period by the total number of tenants at the beginning of that period and multiply the result by 100.
• Net income: The amount of money remaining after deducting operational expenses such as salary and wages, cost of goods or raw materials, and taxes.
• Lease renewal rate: The percentage of tenants who renew their leases at the end of their current contract—to calculate, divide the number of residents who renew their leases by the total number of leases that expire during a specific time period and multiply the result by 100.
• Maintenance costs: Expenses incurred to keep property, equipment, and vehicles functioning properly. Tasks include electrical repairs, routine inspections, painting, lawn care, snow removal, trash collection, pest control, and much more.
• Return on investment (ROI): A financial ratio that measures the profitability of an investment—to calculate, divide the net profit by the total investment cost.

Once you determine which KPIs you’d like to measure for your business, you should:

• Create goals for each KPI
• Collect, synthesize, and analyze your data
• Create a plan to achieve each goal
• Measure results after executing your plan
• Share your findings with key stakeholders

Data Reporting Solutions in Rent Manager

Having software that provides customizable reports and valuable insights for your data is crucial for success. Using Rent Manager’s custom reporting solutions and more than 450 pre-defined reports for budgeting, financial statements, tenant transactions, vacancies, and more will help you streamline your reporting processes so you can focus on the bottom line.

Conclusion

In order to make informed decisions for your company, you need access to real-time, accurate data. Selecting KPIs you intend to measure for growth and performance is just the first step. Leveraging property management software—like Rent Manager—to customize dashboards and reports, interpret data, and deliver insights will optimize your operations and maximize profitability, leading to lasting success.