I Never Liked Roller Coasters Anyway
“I don’t have to worry much about occupancy anymore. I get to focus on maximizing revenue and effective rent growth now instead,” described Steve Adams, managing director of asset management at LaSalle Investment Management. This was a primary theme during the revenue management executive panel at RealPage’s recent user conference in Vegas. A diverse group of seasoned revenue management users spoke about their experiences with YieldStar. Greystar, Camden, Madison, and Orion were represented in addition to LaSalle. These organizations all highlighted their transition away from an occupancy obsession.
The industry has traditionally been fixated on occupancy, where unruly, short term dips are addressed with concessions, with this pattern repeating itself over and over again like a roller coaster. Through the blending of statistics and your asset strategy, YieldStar revenue management produces optimal utilization (occupancy) with the highest rent growth possible. The result: more consistent cash flow and maximum rent acceleration.
What does it mean not to worry as much about occupancy? Can the industry really move away from this deep seeded complex? If 900,000 YieldStar units in over 170 markets coast to coast provide reasonable evidence, then the answer is yes. The system substantially reduces average vacant days and optimizes utilization on a sustained basis in two primary ways.
First, through sophisticated expiration management handling, which automatically spreads out leases by month and throughout each month, imposing premiums for unfavorable expirations and pushing renters into more desirable lease terms.
And second, with move-in day pricing, which encourages renters to take possession of available units sooner, since the cost for each day a unit is available and held is amortized across the term of the lease. The sooner you move in, the lower your rent. And if an operator sells it right, the lower rates associated with more favorable lease terms and move-in dates are an incentive for the renter, but involve no discounting whatsoever.
So what does it take to get there? Some patience is involved. To achieve optimal asset utilization, you have to launch YieldStar revenue management and then work your way through the rent roll, which doesn’t happen overnight. The return on your patience, however, is significant. Today’s leading owners and operators are outperforming the rest of the industry on an ongoing basis by 3 to 7 percent with YieldStar.
You can too. Contact us at Results@YieldStar.com.