Preparing Your Multifamily Organization’s Budget for 2021 and Beyond

The year is coming to a close and along with holidays, that means it’s time for budgets. Creating your 2021 budget will likely be a different experience than you’ve had before – there are different things to consider and the market has shifted.

Where many industries are seeing a dip, multifamily rentals have seen rental vacancy rates drop by about 6.6% during 2020 and the percentage of non-renewed leases fell from 47.5% to 42.1%. While this is encouraging, it’s still important to take the global pandemic into consideration in your 2021 budget because it’s changed how we all do business.

As you are considering your 2021 budget, keep these key areas in mind:

New Leasing Methods and Opportunities

Leasing used to be as simple as someone coming into the leasing office, asking to see an empty unit, then signing the paperwork. In today’s post-pandemic world, things are different. In your leasing practices, you need to budget for a more virtual experience. Consider working virtual leasing appointments and virtual tours into your budget. That may require new technology or additional people. You may also consider hiring a professional videographer to film a virtual tour that you can post on your website.

Another aspect of your leasing budget to take into account is working out longer leases with new tenants and renewing leases with existing tenants. Not only does this save you money in turning over an apartment, it also locks the tenant into a contract, assuring you the rental income.

New Resident Priorities and Amenities

Depending on where your multifamily rental is located, there are certain lockdown measures being taken on and off. That doesn’t mean you should skimp on amenities, especially when it comes to business centers. Many people are now working from home and having a business center with socially distant workstations can be a huge draw for many tenants.

Another way to keep up a decent amount of amenities for tenants while staying safe is to invest in virtual events. Having virtual exercise classes can take the place of a gym if you have to close that down. A virtual movie night or book club can make up for community events and gatherings. Get creative and find ways to make up for amenities that residents can’t use right now.

Don’t Skimp On Marketing

Marketing is your best friend, regardless of what’s going on in the world. The difference with marketing in a post-pandemic world and the old world of marketing is that you should focus more of your marketing budget on virtual and online marketing. Things like incentives for prospective tenants taking a virtual tour or for signing a longer lease can be extremely effective.

You should also consider your social media marketing budget. With more people spending more time at home on their social media pages, you can have a wide reach simply by creating a few social media advertisements. Take advantage of social media to spread the word about leasing opportunities and promotions that you’re running.

Make Room For Maintenance Safety

Safety in a multifamily property is always important and now more than ever you need to set aside a portion of your budget for maintenance safety. This would include the obvious: budgeting for extra sanitation, both when you turn over a rental unit and in any open amenities at your property. But you also need to think about how maintenance employees interact with tenants and how you interact with the maintenance staff.

A creative solution is offering the tools and materials needed for small fixes, like switching out lights or replacing broken light fixtures. If your residents feel they can handle the work and you provide the materials, it saves your maintenance staff and residents from possible exposure. You may also want to invest in technology and gadgets that allow for easier communication between the office staff and maintenance staff. Things like tablets and smartphones are a small price to pay when you can make communication easier with less in-person time.

Don’t Budget With Panic

The biggest thing is to not panic while creating your 2021 budget. Don’t budget with emotions, budget with numbers. There are more options than just slashing or raising rent prices. Focus on which areas of the budget are most important: the ones that keep your residents and your staff safe. From there, strong communication with your residents and staff will ease the pain of lost amenities or changes that have to be made.

As the year closes and we all say a happy goodbye to 2020, you can look ahead to 2021 with excitement knowing your budget is in place. With the right care taken, you can keep everyone on your property safe and happy.

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