Tiffany MittalChief Executive Officer, Utility Ranger · CEO of Utility Ranger, in-house utility billing software

The Secret to increasing apartment profitability-revealed! #multifamily #landlordtips #biggerpockets

4 May 2023 · 1 min

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In this segment, the speaker explains two key tactics for improving multifamily property profitability. First, they "unbundle" various services and technologies, which directly raises Net Operating Income (NOI). Second, they invest in unit upgrades—specifically installing durable countertops and vinyl plank flooring—to reduce the frequency and cost of carpet replacement during tenant turnovers. These material upgrades extend the lifespan of unit finishes, lowering turnover expenses and contributing to higher overall profitability. As a result of these practices, the typical cash‑flow break‑even period after a turnover has decreased from about 30 months to roughly 24 months, indicating a faster return on investment and stronger cash flow.

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Why, if you can unbundle all of these things, you can actually drive NOI through these different technologies. So that's one of our techniques that we use. We also try to improve the apartment by upgrading things, whether it's countertops and vinyl plank flooring has been a big plus. And we're not having to replace the carpet every single time we have a turnover. The longevity of changing materials when we do turnovers have helped us maintain higher profitability that before it used to say, okay, 30 months was our kind of number of months that we knew after that it was all cash flow. Like we've already paid for the turnover. Now that's really come down and shortened our time. Now it's around 24 months.