Outsourcing Revenue Management
Revenue management is becoming more and more mainstream in the multifamily industry, with YieldStar Price Optimizer delivering two to five percent revenue outperformance for its users on a sustained basis.
But as with most new technologies, the first adopters of revenue management were larger multifamily owners who could dedicate internal resources to the revenue management function. These resources are necessary to support the shift in pricing methodology, including training of both on-site and home-office professionals, business process change management, and ongoing price monitoring and adjustment. Typically, at least one dedicated revenue management professional must be added to support revenue management for every 15,000 units.
However, some companies, particularly smaller ones, may not have the staff to manage revenue management in house. Some don’t have a large enough portfolio to justify the expense, since they can’t amortize the cost across enough properties. And others simply don’t want to manage the function in-house, regardless of their size.
These obstacles have bred its own solution: outsourced revenue management services with YieldStar.
“By outsourcing revenue management to YieldStar, we’ve got a team of multifamily experts handling revenue management for us, who essentially act like an extension of our team,” said Stephen Adams, senior vice president of asset management at LaSalle Investment Management. “They monitor pricing and revenue performance at our properties daily, collaborate closely with each of our fee managers, and provide consolidated reports to us often, so we always know what’s going on across our portfolio.”
YieldStar’s pricing advisory services team works closely with field operations and investors/owners to ensure everyone understands individual asset strategies and is in agreement on pricing. The team also provides insight into performance trends that are easier to identify and contend with quickly when YieldStar revenue management is being utilized. YieldStar’s pricing advisors are all seasoned multifamily asset managers or regional managers who have been in the trenches and have chosen to specialize in revenue management.
“Our industry is different from airlines, rental cars, hotels, and other businesses that use revenue management,” said Dan Gumbiner, president and CEO for Orion Residential, who owns and manages approximately 6,300 units in seven markets throughout the United States. “It was important to us that we outsource this function to a group that specializes in the multifamily industry and uses technology designed for owners and operators of apartment communities. It makes a big difference working with people who understand our business strategies and can work with us to help achieve our goals.”
For companies without sufficient staff or portfolio size to justify an in-house revenue management expert or for those that simply prefer outsourcing, revenue management with YieldStar is now with everyone’s reach.