First in a 9-part series of “quick hit” blogs on the quickest way to uncover hidden revenue from leasing based on the presentation Bryan Pierce, Carol Enoch and Donald Davidoff gave at NAA’s 2024 Apartmentalize conference.

In a year with at best anemic rent growth in most markets, operators are under tremendous pressure to find/save every possible dollar. They pay close attention to growing labor costs, implement “back to basics” training to improve sales, cull underperforming marketing channels and maybe even defer some maintenance.

Yet based on our experience reviewing more than a thousand communities, just a couple of hours of attention to each community will likely yield hundreds, and more often thousands, of dollars of incremental revenue per MONTH!

What is this magical fountain of missing revenue: mislabeled and mis-priced unit amenities (including square footage adjustments). This blog and the ones following will give a “quick hit” on each of the major categories of “amenity fails” we have found. These lessons are not merely theoretical. They come from actual reviews of real communities.

You can implement these ideas manually and/or in Excel. Or give us a shout if you want to talk about software that will make it even quicker and easier to find these.

Fail #1: Amenity “Holes”

This is one of the most common and most costly mistakes. It happens when homes with an amenity are not tagged as such in the property management system (PMS). A classic example is units 201 and 401 having a balcony and unit 301 not having one tagged in the PMS even though the entire 01 stack has balconies.

Most frequently, this is a remnant of a missed entry at the time the property was configured or some other “fumble finger” error. Occasionally, it’s the result of deliberate subterfuge. A savvy, but less-than-honest, operator knows that lease audit reports only audit base rents. Rather than making the case with their Pricing Manager for, say a $50 deduction in rent, they simply find an amenity that is $50 and remove it. The price goes down and the lease still passes the compliance audit.

Whether intentional or not, this can be costly. A single $50 amenity hole is worth $600 a year or $10,000 in lost value using a 6% cap rate.

Stay tuned for the next “quick hit” in this series