Why Revenue Management?

Property managers want to lease to prospective residents at a fair price while not conceding too much in lease negotiation. But the complexities of the multifamily market and all its variables make it very easy to over-price or under-price apartments. Even armed with spreadsheets, calculators and timely, accurate market research, human beings simply can’t accurately calculate all the variables necessary to come up with a price that ideally balances rent price with occupancy for maximum profit.

In 2004, YieldStar introduced the first revenue management system developed from the ground up for the multifamily industry – Price Optimizer. It remains the only pricing solution designed specifically for the multifamily industry.

And revenue management is making a critical difference in performance for those who have adopted it. Soon, as in other businesses, it will be considered a necessity rather than an option.

Here are some important benefits that you will receive from instituting a revenue management system.

Increased Revenue Premium

Drawing on unsurpassed market data, and weighing unit availability, competitor pricing, local market trends, and other key variables, Price Optimizer will help you achieve your target goals for optimal occupancy at the highest rent price. In fact, Price Optimizer has been proven to deliver a sustained revenue premium of two to five percent over properties not using the system.

Reduced On-Site Staff Burden

One of the most significant benefits is removing the burden of calculating or negotiating pricing from your on-site staff. Leasing personnel are typically uncomfortable with this responsibility due to a combination of uncertainty about pricing accuracy, the lack of sufficient time to do research, and discomfort in negotiating rent with prospective renters.

Improved Leasing Flexibility

In addition to removing the pricing burden from your staff, Price Optimizer also dramatically improves your leasing flexibility and customer service by making it easy to offer prospective renters a wide array of alternatives in pricing based on move-in date, length of the lease, selected amenities, and other variables. These pricing choices would otherwise be impossible to calculate and offer for every available unit every day without the risk of over or under-pricing.

Consistent Pricing Methodology

Price Optimizer allows you to institute consistency in your pricing methodology across all your properties. Of course, you can always use your expertise to complement Price Optimizer pricing recommendations.

Reduced Fair Housing Exposure

And a final benefit: the use of a revenue management system to generate pricing also reduces your exposure to Fair Housing infractions, because subjectivity is eliminated when using pricing that is predetermined by an objective source.