Another great way to drive NOI – rent growth alone is so 2019!
Pushing rent increases to drive NOI and relying on income alone sooner or later will take a back seat, and expense optimization will again prevail as the industry cycle moves towards economic slowdown. Multifamily management firms that stay ahead understand that NOI through expense optimization can be achieved easily by partnering with a Purchasing and Procurement Service Organization.
While intelligent expense management is always a common goal among companies, the opportunities to maximize this area of your business are on a different plane. Purchasing optimization as a strategy to drive NOI requires resources and expertise at a different caliber than one can do alone, which is why you need a specialized Purchasing Optimization Organization to partner with like Buyers Access.
Purchasing Quiz: Your purchasing defined
Activity: Select the number of each statement that your company currently has in place for purchasing and procurement activities.
- Onsite teams have the necessary tools to complete purchasing activities effectively through our company resources and systems.
- Our current payables process eliminates pricing and invoicing discrepancies.
- We have the best pricing negotiated with multifamily industry MRO suppliers such as Home Depot Pro Multifamily, HD Supply, Maintenance Supply Headquarters, and like organizations.
- The procurement department handles purchasing activities at our company. For larger projects and renovations, we have regional maintenance and construction project managers that ensure efficiencies.
- Our company has reporting metrics that track product spend, pricing, contractor scopes, and uncovers opportunities for further optimization.
- We have less than 1000 units and don’t need a purchasing service.
Now that you have your numbers match them with the numeric category below and unlock insight into how to better drive NOI through expense optimization.
Don’t skip anything!
"Our site teams oversee our purchasing operations and have a (weekly) report they turn in showing the efficiency."
Operating efficiency is becoming harder to achieve and the reliance on site teams to a level that drives NOI is sadly unrealistic. Staffing challenges plague the multifamily industry, especially in maintenance. Residents also are now expecting an “On-Demand” lifestyle now that services like “Amazon-Prime” and others are able to deliver faster than ever. The expectation as created the same “On-Demand” expectations for residents and site-teams have to work fast! We can’t overlook it or balk on adopting it, we must keep up with innovation and deliver. Residents are the number one revenue driver in the multifamily industry so taking care of them to exceed their expectations is important and takes priority. Take care of your teams and your residents and place purchasing optimization in the hands of an inclusive purchasing organization specializing in the multifamily industry, such as Buyers Access.
"Our site managers oversee our payables and are always catching duplicate invoices and price discrepancies right when they happen."
That is a good start, but your manager has so much more on their plate, such as monthly renewals, aggressive rent increase rates challenging retention efforts, overseeing maintenance, etc. The leasing teams, can they help? Where is maintenance? The leasing teams are fighting for their life to get leases and keep the property stabilized while growing GPR (Gross Potential Rent) in a highly competitive market. Maintenance is short-staffed and over-worked, your lender inspection is next week. Let us be the solution. Buyers Access gives on-site teams additional bench-strength through people who support daily purchasing activities, reporting, and contractor sourcing on-demand.
"We have contract pricing with our suppliers already, and we get bulk discounts as it is."
Activity: Test your consistancy-
Let’s validate the price on one item by answering a simple question. You can do this on your own to see if this solution is performing at its highest potential.
- Were you charged the same price on every faucet of the same item number from the same supplier in 2019 company or portfolio-wide?
- If not, how many different prices were you charged for that same faucet from the same supplier in 2019?
"Our procurement department already standardized the company product selection and negotiates these deals."
Having a procurement department is wonderful! Can your procurement department offer "On-Demand" support to your on-site maintenance and office teams to help with things like emergency contractor sourcing, returning incorrect items received, etc.? Do they offer an all-in-one eCommerce site to minimize the risk of pricing errors, save time through automation, or work to source and select "top-item" lists? Buyers Access' model is inclusive and will provide both managers and leadership visibility through customized reporting in real-time, approval controls, and other innovative solutions and strategies.
Are you still trying to figure out the answer to the faucet question in category 3?
- Let’s talk reporting.
The visibility you gain through operating data-driven purchasing activities makes answering this question easy. You may be struggling, and that is okay. Line item analysis and segregating products in GL code reports by supplier and item type can take a lot of time, time you may not have or can be better spent focusing on resident retention. Once you do find these metrics, the second part is cross referencing to ensure that agreed upon or "contractor" negotiated pricing between you and your supplier pricing was used 100% of the time, company-wide.
You do want the same low prices each time, correct? Of course you do! And why work harder when you can work smarter?
And finally.... Scenario 5
"We have less than 1000 units and don't need any purchasing optimization."
If you are under 1000 units and don’t think that this is applicable, think again! We have a special Small Units Program that leverages resources to get them the same deals realized by larger organizations when buying maintenance and repair supplies. Click here to learn about our Small Units Program now.
AND....Back to the Faucet activity in Scenario 3 ... Did you find the answer?
My final proposal for you is this:
Buyers Access will answer your faucet question AND will uncover the total savings opportunities based on your companies personal puchasing behavior for 2019. That takes care of time savings through finding the answer to the faucet exercise (and future pricing verifications) faster, and money saved through leveraged resources and strategy.
CLICK TO GET ACCESS- to begin the process.
We want you to make an informed decision about the fate of your NOI and we can show you your data, not a hypothetical example. We want you to have all the information to support your taking the next step and saving 10-20% on purchasing without sacrificing quality or quantity.
Thanks for playing and don't forget...
Rent growth as a strategy alone is SO 2019 and it's 2020!