Maximize Multifamily NOI: 5 Ways Beyond Raising Rent

As a multifamily property owner, increasing Net Operating Income (NOI) is almost always one of the highest priorities. But with tenants already feeling the squeeze from sky-high costs, raising rents isn’t really the best or most feasible solution. Moreover, pushing rents higher could mean increased turnover or vacant units—both of which can hamper bottom lines significantly.

The good news? There are other ways to increase NOI in multifamily properties without putting extra pressure on residents. In this blog, we’re diving into five practical strategies to increase NOI—while keeping residents happy and reducing turnover.

5 Ways to Maximize NOI Beyond Raising Rent

1) DIVERSIFY REVENUE THROUGH UTILITY INCOME

One of the easiest ways to optimize NOI in multifamily is by making better use of existing resources. Monetizing underutilized amenities can bring in additional income without affecting the resident experience.

• Monetize Parking and Storage: Got empty parking spots or storage units? Turn them into revenue! Offer premium parking for a fee or rent out storage units to tenants who need extra space. It’s convenient for residents and adds to your bottom line.
• Install EV Charging Stations: With more people driving electric cars, installing EV charging stations can help you tap into a growing demand. Offer it as a paid amenity to attract eco-conscious renters and generate additional revenue.
• Shared Utility Services: Sub-meter water usage so residents pay based on their actual consumption—this can help reduce waste while boosting NOI. You can also offer high-speed internet as an optional service for extra revenue.

2) OPTIMIZE PROPERTY MANAGEMENT FOR EFFICIENCY

NOI optimization in multifamily often comes down to how well a property is being managed. Streamlining operations and weeding out inefficiencies can make a huge difference.

• Automate Routine Tasks: Free up your team by automating rent collection, lease renewals, and maintenance requests, amongst other things. Property management software can handle these tasks, allowing your staff to focus on what really matters: keeping residents happy.
• Outsource Non-Core Activities: Not everything has to be done in-house. Outsource non-core functions like multifamily accounting, bookkeeping, or specialized maintenance jobs. This can cut costs and improve overall efficiency—ultimately boosting NOI.

RELATED BLOG: REVEALED: A one-stop solution for operational challenges bothering Multifamily executives!

3) ACHIEVE HIGHER OCCUPANCY WITH FLEXIBLE RENTING

To keep up with changing resident preferences, it helps to get a bit creative. Offering flexible rental options like co-living and short-term rentals can make your property stand out, keep vacancies low, and bring in extra income.

• Co-Living Arrangements: Co-living is ideal for younger tenants and professionals who want to save money while enjoying a community vibe. By offering shared living spaces, you can attract these renters and even increase rent per square foot, compared to traditional leases.
• Short-Term Rentals: Not everyone needs a long-term solution. Business travelers, students, or anyone in need of temporary housing can be drawn to short-term rental options. Partner with online portals to bring your property in front of this audience – fill vacant units faster and keeps income consistent, especially in markets where demand fluctuates.

4) LEVERAGE TECHNOLOGY FOR COST CONTROL

Controlling costs doesn’t have to be complicated—tech can help you simplify and save. Pick the right tools to streamline operations, monitor energy use, and give your team more time to focus on core activities.

• Smart Building Systems: LED lighting, smart thermostats and automated HVAC systems can make a big difference. These systems bring down utility bills and make it easier to monitor energy use. Less waste means more money in your pocket!
• Property Management Software: A comprehensive, dependable software can do the heavy lifting when it comes to lease renewals, maintenance requests, and more. Having everything in one place makes it easier to make quick decisions that save money and boost efficiency.
• Resident Self-Service Portals: Letting residents handle simple tasks—like paying rent or submitting maintenance requests—through an online portal is a win-win. It cuts down on paperwork for your staff, while also giving residents the convenience they love—which means happier tenants and better retention.

RELATED BLOG: The ultimate guide to choosing the right multifamily accounting software – read now!

5) REDUCE TURNOVER WITH RETENTION PROGRAMS

Happy residents are more likely to stay put, which means fewer vacancies and a more stable NOI.

• Resident Loyalty Incentives: Offer perks for lease renewals, like discounted rent for the first month or a small upgrade to their unit. These incentives can encourage residents to stick around rather than look elsewhere.
• Community Events and Engagement: Create a sense of community by organizing events like movie nights, dinners or fitness classes. These experiences can act as a deciding factor when leases are up for renewal.
• Prompt Maintenance Response: Nothing frustrates residents more than slow maintenance. Make sure maintenance requests are handled swiftly. A well-maintained property and good service can make all the difference while deciding whether residents renew their lease or not.

Conclusion

Maximizing NOI without raising rents is all about working smarter, not harder. By getting creative with your resources, cutting out inefficiencies, and focusing on keeping residents happy, you can increase NOI in multifamily properties while building a community that residents love calling home.

At QX Global Group, we specialize in helping multifamily businesses turn these strategies into results. Whether it’s streamlining back-office operations, improving reporting, or addressing talent gaps, our multifamily accounting solutions are designed to optimize, save, and scale. Ready to take your property’s financial performance to the next level – connect with our transformation experts today!

Originally published Oct 17, 2024 09:10:53, updated Oct 17 2024

Topics: Finance and Accounting Transformation, Multifamily