A cheat sheet wasn’t required in college to break down the first three rules of real estate. As universally known, location qualifies as the answer to all three.
A prime locale is important for a reason. More attractive homes drive more revenue—which happens to be the fourth rule of real estate.
Naturally, revenue has always been closely correlated with location, but the apartment industry hasn’t fully vetted that connection. Essentially, the industry has some untapped potential by not fully exploring the prospective benefits.
Location has always been thought of in a conventional sense. Development teams pay for land in a premium location, knowing that proximity to various points of interest is vitally important to today’s renter. But apartment operators sometimes neglect to consider location within the property.
With insights based on the true location of homes, operations teams have the insight needed to charge a premium for units that are close to their assigned parking spaces. They can lower rents for homes next to a construction site in order to lease them faster. Essentially, micro-trends at a community are almost impossible to diagnose without the context of onsite location details.
Apartment operators often utilize various dashboards to uncover ways to reduce expenses and opportunities to capitalize on revenue. But those dashboards often group homes into broad subcategories and lack context. A more intuitive way to increase revenue involves assessing tendencies of residents based on the location of their home. Operators who are actively and consistently increasing the NOI at their organizations often do so by looking at location first.
In addition to diagnosing esoteric, sometimes counterintuitive trends at a property—such as homes near the pet park leasing at a slower rate—an interactive map can provide advanced insights about a community’s rentable items. It allows operators to identify revenue opportunities and maximize them quickly.
Developers might also utilize location insights as a blueprint for future communities. Seeing what worked—and what didn’t—at existing communities allows them deftly modify at the next development. Perhaps adding some space between the fitness center from the dog park would serve as a positive tiebreaker factor in certain design layouts.
With multifamily in a nonstop pursuit to streamline processes, map-based visualizations are a key component of the immediate future. Marketing teams need to lease units fast and overcome objections to long-standing vacant units even faster. Revenue managers need to increase leasing velocity and overcome creeping exposure. The C-Suite needs to increase NOI. Evaluating unit location is the most efficient way for all teams to collaborate, assess community-specific variables and form leasing strategies without increasing marketing expenditures.
Location already receives triple credit atop the list of deterministic factors in real estate. But even the threefold recognition doesn’t take into account another way location can drive revenue—by relaying insights based upon an interactive map of the community.