Happy budget season! Multifamily communities and corporate teams are starting their annual budgeting and forecasting exercises, but what’s different this year? As we edge out of the pandemic, what budget season best practices can multifamily operators employ to ensure a happier, smoother budget process?

We hosted a webinar panel with industry experts from top operators to get insider tips on how to budget around uncertainty and bad debt — two areas that all owners and operators will need to focus on for the upcoming year. To help fellow budgeters prepare, our panel discussion focuses on:

– Key goals for budget season teams
– Top budgeting challenges and opportunities
– Ways to mitigate risk and maximize asset performance
– How to improve accuracy, reduce expenses, and boost revenue

Below is a recap of the topics and conversations we covered during our panel, featuring Christine Bright – Regional Manager at Topaz Asset Management, Yetta Tropper – Executive Director at PGIM Real Estate, and our very own, Kevin Huss.

[cta_button link=”#anchor” text=”Watch Webinar”]


What Are the Major Multifamily Budgeting Challenges?

With all the uncertainty and unknown variables, this year is not a budget-as-usual scenario.

Apartment Demand & Rent Growth
Economic recovery and employment growth have fueled unprecedented demand for apartments as the worst of the pandemic appears to be behind us, leading to rent growth that’s off the charts. Operators are left wondering if this trend will continue, or if regression is expected.

Evolving Legislative Landscape
Legislation has been constantly changing. Between a patchwork of eviction moratoriums, several extensions of the federal moratorium, and various rent assistance programs, it will be interesting to see what happens once eviction filings resume. There’s also been a relatively underwhelming rollout of emergency rent assistance funds — of the roughly $45 billion allotted, only $1.5 billion has been disbursed thus far. Are operators prepared to help residents take advantage of these programs?

Rent Delinquency
Related to the ever-changing legislative landscape is rent delinquency. How many residents are delinquent or will become delinquent? Will residents who are behind on rent be able to catch up? Operators need to focus on strategies to minimize delinquency rates, meaning they’ll need to be diligent in assisting their residents access the funds available to them.

New Renter Profiles
Operators also have to consider new renter behaviors. For example, many residents are signing for longer lease terms, using flexible rent payment solutions, shifting to remote work, and/or relocating to more affordable markets. All these factors contribute to a strong multifamily market.

Lease Concessions
Since the pandemic, operators have leaned heavily into financial concessions and economic incentives. Which lease concessions can operators offer without sacrificing income? It will be extra important this year and next to balance concessions against economic occupancy.

These are just some of the many challenges and questions that operators will need to think about and address this budget season.

What Are the Areas of Opportunity for Multifamily Budgeting Teams?

The multifamily industry has learned many lessons during the pandemic, which now present as unique opportunities in 2022.

Due to healthy economic growth, recovery is well underway. In the first half of 2021, evictions were expected to climb, vacancies to soar, and rental rates to potentially drop. However, the opposite of this happened due to eviction moratoriums being extended. Now we’re seeing incredible rent growth, strong occupancy, and stable vacancy levels. In addition, rising home prices are creating more demand for rentals, properties are selling like hotcakes, cap rates are getting squeezed, and there are bidding wars for apartments.

While the end of this book seems to be nearing, we still don’t know exactly what that will look like. How can apartment owners and operators prepare and capitalize on the positives? Moral of the story — they’ll need to control the controllables. Operators have learned to operate with fewer resources and lower expenses.

If the market is already experiencing healthy rent growth and occupancy, then what’s next? Moving forward, NOI improvement strategies will continue to be a focal point — operators need to double down on reducing bad bad debt and creating new channels of ancillary income.

How to Optimize Your Multifamily Budgeting Process: New Budgeting Priorities

This year, it will be especially important to focus on two new budgeting priorities. First, how can you mitigate risk? Second, how can you maximize asset performance and value? Essentially, operators need to pivot to budget around uncertainty and bad debt.


While the worst of the pandemic seems to be behind us, multifamily budgets should still account for best and worst-case scenarios. We can’t predict the full impact of COVID on 2022 budgets, but we can plan ahead to have a more secure understanding of the year ahead. Knowing the challenges and opportunities will help yield more accurate results, manage uncertainty, control bad debt, and protect NOI.

8 Best Practices For Budgeting Around Uncertainty & Bad Debt

To more effectively control bad debt and boost NOI, operators should dial in on the following budget season best practices:

1. Create New Budget Categories – By creating new budget categories, your team can identify the biggest value drivers. Historically, if you’ve had a catch-all income or expense account, consider creating more accounts to create transparency.

2. Budget With Flexibility in Mind – Being flexible is something we’ve all been forced to do during COVID. By taking a flexible approach to budgeting, your team can deliver more accurate projections.

3. Adapt to Evolving Team Roles – If the pandemic taught us anything, it was that we’re all capable of adapting for success. This means operators should continue to stay agile and proactive as your team’s roles and needs change.

4. Diversify Ancillary Income Streams – Tap into ancillary income channels that create incremental value and reduce bad debt. In other words, identify efficient sources of NOI and create income with little to no expense to your property (e.g., Zero Deposit lease insurance).

5. Invest in AI and Virtual Leasing – We all know that leasing has gone virtual. If you haven’t already adopted virtual leasing (e.g., virtual tour platforms or automated payment solutions), you’re losing out on key ways to optimize leasing and improve your organization’s returns.

6. Take Advantage of Rent Assistance Programs – On top of reducing delinquency, capitalizing on rent relief can help improve renewal rates which has a downstream effect on occupancy and rent growth.

7. Leverage PMS & 3rd-Party Data – Consulting market data will help improve budgeting accuracy and reveal areas that your organization can save on costs and minimize risk.

8. Offer Concessions Responsibly – Draw in residents while protecting economic occupancy. This means finding ways to boost your bottom line without leaving your property exposed. There are also other ways to reduce move-in costs for your residents — it doesn’t need to be a concession.

Future-proof your budgeting strategy to mitigate risk and protect NOI—download the multifamily guide on the 7 Building Blocks for Better Budgets:

[cta_button link=”https://info.leaselock.com/budget-building-blocks-multifamily-guide” text=”Get the Guide”]

Industry Experts Share Multifamily Budgeting Insights

In our educational webinar “Budgeting Around Uncertainty and Bad Debt,” our expert panel discusses budget season best practices, trends, and strategies, featuring our budgeting pros, Christine Bright, Yetta Tropper, and Kevin Huss. Here is a preview of the panel questions covered:

  1. In what core ways is budget season different this year from last?
  2. Considering how things have changed, what type of budget variances are operators seeing or anticipating?
  3. Based on what we’ve learned in 2020, how have staffing changes evolved?
  4. What steps can operators take to increase occupancy, lower expenses, boost bottom line, and better forecast changes?
  5. How are operators benchmarking revenue growth for next year?
  6. Operators have played it safe this year — how can they be more aggressive in 2022?

To access a recording of the entire panel session, fill out the form below:

It’s nearly budget season — are you in budgeting shape? As multifamily dives into budgeting and forecasting exercises, apartment operators need to do all they can to make the process as smooth as possible. A pain-free budget season may seem out of reach, but you can make it happen.

How can apartment operators increase income and reduce expenses? And how can they protect against rent loss and maximize asset performance?

To get started, be sure your organization knows these key pointers:

  1. Ditch Budgeting Spreadsheets
  2. Avoid Copying + Pasting Standard Budget Items
  3. Implement “Bring Your Own Device” Team Policies
  4. Assign Roles & Responsibilities Involved in Budgeting
  5. Look at Historical Budget Data

[cta_button link=”#anchor” text=”Download Guide”]

5 Pointers for a Smoother Multifamily Budget Season

1. Abandon Spreadsheets
Who has the time and patience for spreadsheets? Who wants to write variance explanations to your owners every month? This budget season, ditch redundancy and manual data input to save your organization from costly mistakes and budget variances. Multifamily is in the thick of a technology revolution, so utilize integrated software programs like MRI, RealPage, ResMan, and Yardi that improve accuracy, streamline budgeting, and enable you to more effectively forecast.

2. No More Copy + Paste
When tasked with creating budgets for multiple properties, it might seem like copying and pasting standard budget items from one year to the next would be effective. You already know the expenses fit within budget. But that Control C + Control V might actually lead to missed opportunities to save.

For example, long-term contracts for technologies like printers, mobile-first technologies for maintenance and resident apps are one area where savings can be found. With the influx of more proptech into multifamily comes the influx of options. Today suppliers are becoming more open to extending 12-month contracts instead of 7-years or even month-to-month contracts which over time could positively impact your budget’s bottom line.

3. Engage BYOD
Why pay for mobile devices when your teams already have their own? “Bring your own device” policies are gaining momentum in multifamily as it offers the opportunity to save budget, reduce IT burdens, and offers teams the comfort of using their own tech devices. Stipends for new personal technology are often less costly than purchasing new devices.

4. Designate Roles & Responsibilities
To effectively collaborate with key stakeholders, designate responsibilities from start to finish. This means coordinating across all team members involved in preparation, routing, approvals, and distribution to the right personnel. This will ensure visibility and improve collaboration for a smoother budgeting process.

5. Compile Market Data Research
As with any budgeting and forecasting exercise, look at historical budget data by property and monitor current market and submarket conditions (e.g., marketing, demographic, and economic changes) that impact leasing, retention, and profitability.

Multifamily Survival Guide for Budget Season: Building Blocks for Better Budgets

To help apartment operators optimize their budgeting process, we’ve put together a guide on the 7 Building Blocks for Better Budgets with insights on

  • Economic stressors to budget around
  • Ways to outsmart uncertainty and mitigate risk
  • Budget builders that unlock additional value
  • Important considerations for new tech solutions

Lease insurance—what exactly is it?

In the multifamily industry, apartment lease insurance is a completely new insurtech product designed to totally eliminate costly security deposits, drawn-out surety bond applications, and confusing guarantee programs, all of which are burdensome for both residents and operators. LeaseLock deploys lease insurance through its Zero Deposit Platform and unlike common “deposit alternatives” in the rental housing market, lease insurance is designed to replace security deposits with seamless insurance technology and provide apartment operators enhanced protection on every single lease.

How Does Apartment Lease Insurance Work?

Instead of paying a costly upfront deposit upon move-in, renters pay a small monthly deposit waiver fee along with their rent. In turn, the property is protected against missed rent and damages with customized coverage.

One of the defining features of lease insurance is that it’s the only product designed to protect the property management company and asset owner — meaning properties gain remarkably more coverage than they would with a traditional deposit, which significantly reduces bad debt.

Top Benefits of Lease Insurance

Lease insurance offers several key benefits, including:

  1. Superior coverage
  2. Renter affordability
  3. Native lease integration
  4. Improved online reputation

1. Stronger Protection Against Unexpected Events and Market Disruptions

The COVID-19 pandemic and subsequent recession have led to industry-wide uncertainty. Luckily, lease insurance has been the answer to many operators’ financial concerns. Built on a sustainable loss ratio model, lease insurance eliminates operational risk and provides customized insurance coverage against rent loss and damage on every lease with the preferred plan.

what-is-apartment-lease-insurance-RKW-marcie-williams-testimonialCompared to security deposits and deposit alternatives like surety bonds, lease insurance offers 3x more protection on average against rent loss and damages. This shields apartment communities from economic uncertainty. As President at RKW Residential Marcie Williams points out, “Replacing security deposits with lease insurance enables us to protect our assets in an uncertain economy.”

2. Affordable Move-Ins Drive More Traffic and Higher Conversion Rates

Renter affordability has been front and center, especially since the pandemic. As more renters search for affordable living options, security deposits are no longer a viable option for many. Lease insurance, however, eliminates security deposits entirely, meaning properties can attract more prospective renters, accelerate move-ins, and increase conversion rates.


For example, CFO and COO at ROCO Real Estate Damon Evert explained the benefits of replacing deposits with lease insurance after the company achieved an increase of 10 to 20 leads per property per week: “It’s something that should give us a strong advantage when it comes to competing for prospects.”

3. Deep Technology Integration Delivers Results Through Automation

The pandemic accelerated technological change, and with that, automation and integration have emerged as top priorities for operators as they hunt for future-proof technology solutions. Leasing operations have shifted online, and in response, operators are looking for ways to streamline their processes, not add additional steps (i.e., surety bonds create administrative burdens for on-site teams).

From move-in to move-out, Zero Deposit lease insurance software is natively embedded in online lease checkout, lease execution, monthly billing and accounting, receivables and automated claims, and property performance metrics. This enables operators to eliminate deposits portfolio-wide and drive net operating income—without any additional work for onsite teams.

what-is-apartment-lease-insurance-TRG-sheri-thomas-testimonialManaging director of asset management at Trinsic Sheri Thomas notes, “We pride ourselves on being an innovative apartment company that provides the highest level of convenience for our residents. Replacing the security deposit cost barrier with lease insurance delivers a frictionless and automated leasing process.”

4. More Positive Community Reviews

Another advantage of apartment lease insurance has to do with renter experience and online reputation. COO at Bell Partners Cindy Clare explains, “Considering security deposits can also create upfront affordability issues and disputes at move-out, the benefits just don’t outweigh the challenges.”

what-is-apartment-lease-insurance-bell-partners-cindy-clare-testimonialWhen renters don’t have to worry about security deposit deductions or repaying bonding companies (who may run collections on unpaid expenses), they’re more likely to write positive reviews. These reviews often emphasize the affordability of a zero-deposit move-in, as well as the ease of the move-out experience.

All in all, lease insurance helps improve the resident experience which can translate into a more favorable online reputation.

Lease Insurance Vs. Security Deposit Alternatives

Lease insurance is a security deposit replacement that completely eliminates deposits. On the other hand, security deposit alternatives are offered in addition to traditional deposits. Deposit alternatives include surety bonds, rent guarantees, deposit installment solutions, and credit authorization services.


Whereas lease insurance requires no applications or approvals, deposit alternatives such as surety bonds require extensive onsite training on “selling” the solution to renters, which creates friction in the leasing process — and results in low adoption rates. Lease insurance, however, offers native lease checkout integration which creates “zero touch” deployment. Because of this, lease insurance can drive over 90% adoption rates and functions as a true deposit replacement, eliminating the burdens associated with deposit administration and liability.

In addition to workflow differences, lease insurance and deposit alternatives differ in the protection they offer. Lease insurance provides enhanced, customized property protection while leading alternatives are generally designed to cover up to the cost of the deposit. This means operators are able to reduce bad debt significantly at each property with lease insurance.

Why Multifamily Is Replacing Security Deposits With Lease Insurance

Multifamily may be reluctant to embrace change, but the pandemic has shuffled the industry along in adopting new technologies, processes, and priorities to meet the demands of modern renters. Today’s renter experience should be easy, fast, and affordable.


On top of this, security deposit legislation has played a pivotal role in accelerating an industry movement away from security deposits. States have adopted deposit laws that require property managers to offer deposit alternatives in addition to traditional security deposits. In Pennsylvania, a proposed bill goes one step further in providing operators with complete deposit replacement solutions rather than just tightening deposit regulations.

what-is-apartment-lease-insurance-Avenue5-mark-stringer-testimonialOperators are also realizing that deposit alternatives like surety bonds don’t provide sufficient coverage. While they offer renter affordability, surety bonds may not provide reliable loss protection amid growing economic uncertainty. As Executive Vice President at Avenue5 Mark Stringer says, “Deposits are too expensive and surety bonds provide inadequate coverage, putting property owners at financial risk.”

The multifamily industry needs a sustainable software platform that future-proofs their communities by eliminating deposits for good. Deposit replacement solutions like the Zero Deposit Platform should be automated and deeply integrated within leasing checkout and property management systems, create an affordable leasing experience for renters, and generate NOI lift for the property. Lease insurance was designed from the ground up to accomplish this.