New Insights Reveal 80% of Third-Party Multifamily Managers Opting for Centralization of Operations

New Shift in Multifamily Management: Centralization on the Rise

Recent research has unveiled a transformative trend among third-party multifamily property managers, with a striking 80% now adopting centralized operations. This groundbreaking report, spearheaded by Funnel, an AI-driven customer relationship management platform, provides invaluable insights into how these managers are evolving amidst changing market dynamics.

Understanding the Shift to Centralization

The need for improved operational efficiency is at the forefront of this shift towards centralization. In an industry where third-party managers historically operated with less control compared to owner-operators and Real Estate Investment Trusts (REITs), the landscape is rapidly changing. According to the study, conducted by industry consultant Dom Beveridge from 20for20, many firms are re-assessing their business models to adapt.

In-depth interviews with leading third-party managers reveal the intricacies of evolving operational frameworks. Unlike owner-operators that typically focused on centralizing leasing functions, third-party managers are prioritizing administrative functions such as resident account management and screening. This divergence highlights a strategic shift towards enhancing customer interaction and streamlining processes.

Key Findings from the Report

1. Progress in Administrative Functions: The research indicates significant advancements in administrative aspects, with third-party managers seeing high adoption rates for centralized resident services.
2. Combining Owned and Managed Assets: Operators managing both owned and third-party properties are leveraging their owned assets to pilot centralized models before full implementation. This testing phase enables refinement of practices tailored to specific operational demands.
3. Transitioning Chargeback Models: There is a notable move away from traditional chargeback models. Many operators are revising their property management agreements to embrace direct charging frameworks for centralized services.
4. Technological Integration: Advanced AI-powered CRM systems and automation tools have emerged as essential components enabling effective centralization. Establishing contact centers for centralized services is becoming commonplace, enhancing both operational efficiency and the renter experience.
5. Reimagining Property Management: The most effective operators are not merely adjusting old staffing models to fit new centralized structures; instead, they are rethinking property management from the ground up, ensuring a more scalable and efficient approach.

Perspectives from Industry Leaders

In this rapidly evolving environment, Tyler Christiansen, CEO of Funnel, remarked, "Third-party managers face unique challenges compared to owner-operators in their journey toward centralization. Our research showcases how forward-thinking operators are redesigning their business approaches to prioritize efficiency and the quality of the renter experience."

As highlighted in the report, those third-party managers who fail to adopt a more centralized approach may find themselves at a competitive disadvantage. The research underscores that many firms are transitioning from reactive modes, where they wait for directives from property owners, to proactive strategies focused on enhancing their operational frameworks.

Conclusion

The initial findings from this innovative report reveal a promising future for third-party multifamily managers. As centralization gains traction, the industry stands on the brink of significant transformation. The mode of operation for these managers is shifting toward adoptive measures that not only drive efficiency but also elevate the clientele experience. The full report is available now, providing a deeper dive into the technological advancements and operational adjustments shaping the multifamily management landscape.

Funnel continues to play a pivotal role in this transition, offering tools that empower managers to streamline their processes and enhance their service delivery to residents. Construction of a robust tenant management strategy remains critical as the industry moves forward in these unprecedented times.