We take a look at ratings for Rental Only developments using Yardi property and resident management solutions. We compare their ratings with the industry average, as well as schemes not working with Yardi. We also caught up with Regional Director Justin Harley on the challenges facing BTR operators and investors, and how the right systems can help the industry to increase efficiency and scale.
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How does using Yardi solutions affect resident ratings?
Managing 13 million rental units globally, and with 500,000 daily views of their resident app, Yardi provides an end-to-end solution with built-in property management, including resident focused services.
We compared ratings from BTR developments that used Yardi solutions with the rest of our Rental Only sample from the past two years. For a second year in a row, Yardi clients scored higher than the rest of the Rental Only market.
Of particular relevance were the high scores for Management, Customer Service, Repairs & Maintenance, and Additional Services, as you can see above.
Interview: Justin Harley
Regional Director – Yardi
WHAT DO YOU SEE AS THE MAJOR CHALLENGES FACING BTR INVESTORS?
“Demand is strong, but supply is a challenge. Interest rates are high, cap rates are increasing and therefore investors are slightly nervous and reluctant to go in as hard as perhaps they were. That’s just a macroeconomic challenge the industry is facing.
“New entrants in the BTR market are asking, ‘How do we operate Build to Rent? Do we give it to a third party, or do we run it ourselves?’ We see a mixture of both.”
CHOOSING A PROPERTY MANAGER
“If you use a property manager, your first challenge as an investor is getting reliable, accurate data about what’s really happening in your development. Granular data, including things like HomeViews – what are residents saying? What are they doing? What are my resident demographics?
“Then you know what works. You understand trends around your customer and your building.”
A COMMON MISTAKE
“People starting out try to keep things simple and quickly put in various software systems that link together. But if your aspiration is to go to a high volume of units, you’ll soon find shortcomings with this.
“You can do integrations. HubSpot is fantastic but it doesn’t do property. And the more systems you have the more data sources you have.”
EVERYTHING IN ONE PLACE
“In contrast, our Building Performance Report is a complete analysis of your building from inquiries, demographics, and the average life of tenants to the balance sheet, debtors and payables. You see everything in one place.
“Similarly, a resident’s maintenance profile, their payment profile, and their leasing history are all in one place, along with the results of all their surveys. That’s because residents do absolutely everything in one app, whether it’s booking the kitchen, paying a bill, doing a renewal, resolving a problem, etc.”
YARDI SOFTWARE COVERS MUCH OF THE US MULTIFAMILY MARKET – WHAT CAN THEY TEACH US IN THE UK?
“When American entrants come into the UK marketplace, the very first thing they do is put in a software system. Their experience of running large, customer-centric multifamily Build to Rent developments means that they don’t compromise on this.
“They know that marginal gains in every process is the way they make profit. As they make more profit than the next, they become more attractive to investors, and they expand.”
THE NEED FOR SCALE
“Scale is important for BTR because it brings economies of scale and a higher Net Operating Income. You can then provide a better return to whoever you raise capital from, and the cycle repeats.
“It’s a volume game. It’s about margins. It’s about streamlining transactions, so your occupancy is efficient, your unit turn is low and you’re more profitable.”
WHAT DO YOU SEE AS THE MAIN BARRIERS TO SUCCESSFUL SCALING WITHIN BTR?
“As HomeViews data has shown, larger BTR developments are achieving higher average ratings than the smaller ones.
“Why? Because larger developments have invariably invested in the right systems. Residents get what they need faster, and the business is set up to respond faster.”
“THEY ARE VERY QUICK TO SHOW UP IF YOU FLAG
A MAINTENANCE ISSUE VIA THE APP.”
Verified resident on HomeViews, Yardi client development
AUTOMATION LETS YOU FOCUS ON RESIDENTS
“In residential, the volume of work is generated by things that happen repeatedly. For example, for 10,000 units, you potentially have 10,000 payments to reconcile every month. To streamline that, you need to focus time managing the exceptions – the failures – and not the ‘paid as normal’ rule.
“As you scale, transaction volumes increase and will erode your margins unless you have automation in place. This draws capital away from more profitable activity around resident lifecycle, length of lease, extending that, etc. Maintenance, Unit Turn, Payable Invoices – all these can and should be automated.”
PLANNING FOR GROWTH
“You can’t just add another X number of staff every time you add X number of units. You need to make the existing team more efficient so that any additions are incremental.
“Many operators are too focused on let-up. The real profitability comes from operational efficiency down the line.”
SO, INSTALLING THE RIGHT SYSTEMS EARLY IS IMPORTANT – BUT HOW CAN YOU MAKE SURE THEY ARE FUTURE-PROOF?
“Yardi invests 15% of its turnover into R&D – an extraordinary number. The main things we look at are key trends within real estate, customer service, and technology. Then we see how we can incorporate those into the vertical markets
we cover.
“Energy conservation is a big area of investment for us right now, as well as artificial intelligence. We spend a lot of time planning where we see the industry going, and run big user groups so our customers can tell us where they’re heading.”
TAILORING YOUR SYSTEMS
“Generally, when it comes to things like maintenance and collection of payments, there’s a lot of similarity between residential sectors. We understand the key processes within the various sub sectors within Build to Rent, and tailor software functionality to manage those processes.
“We support different leasing journeys for different types of residential real estate across Europe. We adapt to, and invest in, a product that accommodates markets like BTR that we believe are ripe for technology innovation.”
“QUICK RESPONSE, ALSO THRU THE RESIDENT’S APP THAT GIVES YOU EASY ACCESS TO ALL SERVICES.”
Verified resident on HomeViews, Yardi client development
FOR MORE INFORMATION ON YARDI BTR SOLUTIONS, VISIT:
www.yardi.co.uk/build-to-rent-software
Or contact:
justin.harley@yardi.com
Read more about Yardi and find unique HomeViews BTR insights:
HomeViews is the only independent review platform for residential developments in the UK. Prospective buyers and tenants use it to make an informed decision on where to live based on insights from carefully verified resident reviews. Part of Righmove since February 2024, we’re working with developers, house builders, operators, housing associations and the Government to give residents a voice, recognise high performers and to help improve standards across the industry.
