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May 31, 2024
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I am in favor. Revenue management does need to be monitored and calibrated carefully, but in the hands of a competent manager, it can help you strike an equilibrium between occupancy and rate. For a larger portfolio, it strikes me as a must-have.
Having said that, you can't blindly trust it. You also need to be attentive to renewal settings, staleness settings, and overall to the fact that it's an algorithm and that qualitative factors matter. Some markets have intense seasonality, for example, and you might want to lower your baseline at certain times of year to stay defensive - alternately, you might want to crank up rates during the busier seasons to see if you can capture some gain to lease. If you know your market, you may "know more than the system".
Some situations require manual pricing - lease-ups, certain types of reno plans, etc - but pricing software is hugely impactful normally if used right.
Echoing above, I find it very helpful especially for large multi-market portfolios. Its absolutely not a "set and forget" type thing, you have to monitor it and make manual adjustments, but its much better than trying to trust each PM to set rents themselves.
It also does a lot of things that would be really annoying and time consuming to constantly monitor on your own, for example it can automatically detect months with high exposure to turnover and deter adding more expirations in that same month. For example say you have some units available now (middle of May 2023) and the system notices that ~15%+ of the rent roll is set to expire in May 2024, it will automatically give prospects a slight extra premium for a 12 month lease and slight extra discount for an 11 or 13 month lease to try to deter adding more expirations in that same month, and then if the next prospect still opts for a 12 months lease it will make the premiums/discounts larger for the next person (and this isn't a default setting, just one of the many things you can introduce and tweak on your own).
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