The truth about centralization in multifamily property management

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What is centralization for multifamily property management?

Centralization for multifamily property management is the process of creating efficiencies in all areas of operation.

Some may describe centralization as transferring tasks from on-site teams to a 'central' location at the corporate or regional level.

Others may see it as cutting costs or, more bluntly, personnel.

The definition of centralization varies depending on who you talk to (it's undoubtedly the industry's buzzword).

The truth about centralization

  • It's more like 'specialization.'
  • Most companies are still in the experimentation phase of centralization. It’s an ongoing trial-and-error approach to property management.
  • Centralization has been going on longer than some realize.
  • Centralization isn't the perfect solution for every apartment community or property management company.

Centralization is more like 'specialization'

What area of your property management operation needs more focus for you to improve? 

Does your marketing need to produce better leads? Are your leasing agents closing those leads to become leases? Are maintenance requests taken care of quickly? 

Or do you have the right people in the right seat? Are they doing what they ought to be doing to improve whatever you need to improve? Can you make your employees' day-to-day lives more manageable?

Centralization is finding areas you need to specialize in and then figuring out what works and what doesn't. 

Avoiding waste; optimizing resources.

It's taking your leasing, marketing, revenue management, or maintenance, figuring out a strategy to ensure each area operates efficiently at your properties while emphasizing your employee, resident, and prospect experiences.

Centralization has been around for years

Seeking ways to improve multifamily property management isn't new; centralization, as it's being talked about today, has already been occurring for some years. 

It's just being discussed more because of how fast the multifamily industry is changing and the newer set of challenges it faces.

The industry is not too far removed from an era where renting an apartment, from the prospect perspective, was a challenging, time-consuming experience.

In an interview on the Modern Multifamily podcast, David Watson, Founder and CEO of RentVision, recalls his and his wife's experience searching for an apartment just over a decade ago. 

"In the grocery store, you'd get the magazines for listing services with one page per apartment community. You'd see a picture of a clubhouse, a pool, a fitness center, and then they would tell you if they have one, two, or three bedrooms. That shopping process was miserable to drive all over town," he said. "(Apartment marketers would) use that magazine model and apply it to the Internet. You'd go to a website and photos of the pool, the fitness, and the clubhouse, but no photos inside of units."

Soon after, he bought into a property management company and sought ways to better market apartments so future renters could search for apartments and see the inside of units from their couches instead of wasting their weekends driving around cities and touring multiple properties. Thus, RentVision was born in 2009.

That, in essence, is an effort to centralize marketing resources—rather than relying on listing magazines at check-out stands or putting the responsibility on on-site teams to determine how best to market their communities, David sought a more efficient, scalable, and innovative way to highlight apartments. 

It included putting walkthrough video tours on floorplan-specific pages on community websites where all the information a renter needed to lease confidently was available 24/7.

And now, community websites, virtual tours, AI leasing assistants, CRMs, and similar marketing tech, are widely adopted across the industry as the standard.

"It's really interesting for me to see people talking about centralization now," Watson said. "It's been kind of an 'A-ha!' moment."

Centralization isn't one size fits all

Centralization makes sense for many areas of multifamily property management. Accounting is an easy example; it's much more efficient to handle all bookkeeping at the corporate level. 

Inevitably, you will hear more success stories of how companies centralized leasing (marketing, touring, renewals) or operations (maintenance, back-office processing)—but there's danger in assuming what works for some works for all.

You will likely see some companies tout that they have successfully adopted a centralized leasing model. Instead of having agents specific to each property, they have them cover multiple properties in a regional area. But is that the best option for your property?

Or you will hear that some companies moved maintenance personnel off-site, and now those individuals are deployed in multiple communities. However, must you keep a maintenance tech on-site to best serve your residents' needs?

If centralizing those things work (and they can), then great! But, still, it's all trial and error, and there's danger in assuming that everything you do would be better using this model. 

Centralization isn't one size fits all; however, you can find the right ways to make different areas of your operation better or more efficient to get the most out of your resources. And more importantly, do so in a way that positively impacts your current and future residents, too.

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