One of the best films of 1989, “Heathers,” provided a dark view of high-school life. The popular girls ruled the school, and while their “lunchtime poll” question was far from empirical — ‘If you inherit five million dollars the same day aliens tell the earth they’re blowing us up in two days, what would you do?’ — it did show how responses to open-ended questions vary wildly depending upon a multitude of factors.
Data is funny that way; unstructured data is interesting, but it does not necessarily provide sufficient guardrails to allow for any comparative analysis, which means there is often little context within which to determine whether something is good, bad, or indifferent. Most multifamily operators like to look at things slightly differently, which is great . . . but makes it challenging to do apples-to-apples comparisons. Today, we kick off the new year with our top 23 data insights for efficiently operating multifamily properties. Happy New Year, wishing everyone a data-driven 2023!
1. Resident Retention: The percentage of residents that choose to stay when their lease expires is an indicator of whether the property is being successful at keeping residents.
The number of renewing residents at the end of the period 
the total number of residents at the beginning of the period) × 100 = X % retention rate
2. Economic Occupancy: Physical occupancy shows whether a property is physically occupied with residents, whereas economic occupancy shows the percentage of actual rents collected compared to what could be collected if the building was fully leased with market rents. The economic occupancy percentage is an indicator of whether the property is keeping rents close to market and what kind of concessions are being provided; is essence, are the units being filled and priced to their full potential.
Total rent actually collected gross potential rent (i.e., the total potential rent collected if all units were paying rent at market rents)= X % economic occupancy
3. Leased Percentage: The leased percentage shows the actual availability at the property. Since a unit can be vacant but have a lease in place, the leased percentage is a better indicator of the actual state of leasing efforts and what exposure to vacancy the property really has.
Total units with a lease in place (whether occupied or not) + offline units ) total unit count= X % leased units
4. New Lease Trade-Out Percentage: The new lease trade-out percentage is an indicator of whether new leases are renting above or below the average rents in place, and indicates whether rents to new residents are trending up or down.
Total of all rents in place total rent of all newly signed leases during a set period = X % new lease trade-out
5. Renewal Lease Trade-Out Percentage: The renewal lease trade-out percentage is an indicator of whether renewed leases are renting above or below the average rents in place, and shows whether renewal rents are trending up or down.
Total of all rents in place total rent of all renewed leases during a set period = X % renewal lease trade-out
6. Delinquency Percentage: The delinqency percentage is an indicator of whether rents are being paid in a timely manner by showing the percentage of total rent revenue that is delinquent.
Total of all delinquent rent payments during a set period total of all rents in place during the same period) × 100 = X % delinquency rate
Financial Insights
7. Revenue Growth Percentage: The revenue growth percentage is an indicator of whether the property is increasing or decreasing the amount of revenue collected over a period of time.
((total revenue during one period of time (i.e., February) – total revenue during an earlier period of time (i.e., January)) total revenue during the earlier period of time (i.e., January) × 100 = X % revenue growth
8. Expense Growth Percentage: The expense growth percentage is an indicator of whether the property is increasing or decreasing the amount of expenses over a period of time.
(total expenses during one period of time (i.e., Q2) — total expenses during an earlier period of time (i.e., Q1)) total revenue during the earlier period of time (i.e., Q1) × 100 = X % expense growth.
9. Expense Ratio Percentage: The expense ratio percentage is a measurement of property health; it shows whether the amount of revenue going to pay expenses is increasing or decreasing.
(total expenses total revenue) × 100 = X % expense ratio
Resident Insights
10. Rent to Income Ratio: The rent to income ratio shares the amount of an average resident’s income that is going towards rent payments. The Department of Housing and Urban Development recommends rent-to-income ratio of less than 30%; in many major cities the average rents greatly exceed the average incomes needed to hit the 30% benchmark (SmartAsset Rent-to-Income Market Study, 2022).
(total annual rent payments total annual income reported by the resident) × 100 = X % rent to income ratio
11. Cost of Resident Acquisition: The cost of resident acquisition shows the amount of marketing dollars a property spends to bring on (“acquire”) a new resident. Adding to this insight, and perhaps making it even more helpful, consider adding the average cost to turn a unit and the average revenue collected per day times the average days on market to show how much it costs to fill a vacant unit, and how much rent premium is required to break-even on a new lease at market versus the renewal rate on a currently rented unit.
(average amount of marketing spend in a month + average leasing commissions in a month) number of new leases signed in a month = average monthly cost to acquire a new resident
12. Lifetime Value of Resident: The lifetime value of a resident shows the average revenue a resident generates over time at a property. This insight can then be used to determine a little-used, but very interesting, benchmark for properties — the LTV : CRA ratio. Ttaken from the LTV : Cost of Customer Acquistion, or “CaC”, ratio that online companies use, this is a multiple per property ration that shows how much revenue the property generates from a resident relative to the amount spent to acquire the resident. Consider using the average residency and not the average lease term, which may not take renewals into consideration.
(total average rent collected + total average other revenue collected )* average resident tenancy in months = $ X lifetime value of a resident
13. Move Out Reasons Percentage: The move out reasons percentage shows the reasons that residents are moving out, and often can be bucketed into controllable reasons (e.g., maintenance orders took too long) and uncontrollable reasons (e.g., lost job) to determine whether there is more that can be done to retain existing residents and reduce move outs.
(number of residents moving out for a particular reason total number of residents moving out) = move out reason percentage
14. Average Days on Market: The average days on market is a marketing metric that shows how long it takes for the manager to market an available unit and get a new lease in place. The average days on market varies based upon the unit type and available inventory at a property, and informs the pricing strategy for each unit.
total average days of units in the status of occupied with notice to vacate + vacant = average days on market
15. Average Turn Time: The average time to turn a unit is a maintenance metric that shows how long it takes for the maintenance team to complete the necessary repairs on a newly vacant unit and get it ready for a new resident to move in (i.e., to “turn”). In markets where there is low vacancy, the average turn time at a property may highlight an opportunity to increase staffing to get units available more quickly or prioritize turning a particular unit type based upon availability and demand.
total average days from a resident moving out to the unit changing to a status that it is ready for a new resident to move in = average turn time
16. Average Cost to Turn: The average cost to turn a unit shows the average amount of money it takes to get a unit ready to rent. This number can be used to set budgets and identify ways to reduce the cost and have a significant impact on net operating income, particularly in buildings with a large number of units.
average amount of money spent on unit turns in a month (paint, flooring, cleaning, repairs) average number of units turned in a month = average cost to turn
17. Average Work Order Response Time: The average work order response time shows how long it takes to complete, on average, a work order request. Depending upon the size of the property, most work orders are assigned a priority, such as low, medium or high. Work order completion times may impact resident satisfaction and retention, identify staffing issues, and inform whether larger capital improvements expenses may be on the horizon.
The average response time from start date to completion date for work orders by category of work order
18. Lead to Lease Conversion: The lead to lease conversion intends to show the percentage of leads that convert to signed leases in order that an owner or manager can budget for their marketing spend and have enough leads in the pipeline to ensure a full building.
the number of leads in a period number of signed leases in a period = lead to lease conversation ratio
19. Tour to Lease Conversion: Similar to the lead to lease conversion, the tour to lease conversion shows how many tours, or site visits, on average will result in a signed lease. The conversion of tours to lease by leasing agent can also provide insight into the performance of team members, and also looking monthly over the course of several years can identify if certain periods of time have greater or fewer tours, and therefore may require more marketing and/or sales efforts.
the number of Tours in a period number of signed leases = tours to lease conversation ratio
20. Application to Lease Conversion: Finally, the submitted application of prospects conversion to signed lease can show the quality of applicants. Low application to lease conversions might be due to issues with applicants being approved but not signing leases (not truly interested), or applications being rejected (not qualified to become a resident).
the number of applications in a period number of signed leases = application to lease conversation ratio
21. Net Energy Savings: Net energy savings is a way to track whether there has been an impact to the amount of energy usage at a property. Much has been said and written about the lack of consistent and uniform ESG standards in the commercial real estate industry, as well as the importance to residents, investors, and employees that owners and managers commit to ESG initiatives. Making commitments to ESG improvements, setting goals and tracking incremental improvements using easy-to-measure and share insights can go a long way to making ESG initiatives a part of a property’s operational culture.
[per building energy cost during one period of time (i.e., Q1 — 2023) – per building energy cost during an earlier period of time (i.e., Q1 — 2022)] total building energy cost during the earlier period of time (i.e., Q1–2022) × 100 = X % energy savings
22. 30/60/90 Day Lease Trends: The 30, 60, or 90 day lease trending insight takes the notice to vacate (future move outs) from total leased unit count (which includes the notice to vacate units that have already been re-leased) in future periods to show whether the property is trending up or down over the next 1–3 months.
current leased unit count – notice to vacate count over a [30/60/90] day period + newly signed leases = projected 30/60/90 day lease trends
23. Optimal Lease Length: There are less sophisticated ways of modeling the optimal lease length for a particular unit, but our company uses a machine learning (ML) algorithm that considers a property’s average days on market for a particular unit type (demand), the number of that unit type that is available (supply), and the scheduled rental rate to generate the likely yield premium over the standard 12-month term to recommend an optimal lease length for a unit.
projected net return premium over a 12-month lease for a particular unit based upon average days on market for that unit’s unit type and number of units available for that unit type
No doubt there are many more insights out there, and multiple ways to do each (!) — we welcome your feedback and wish you an insightful 2023!
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