Rising Costs in Multifamily Management
by Kate Ballard-Rosa
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Whether our customers are fee managed or owner operated, we continue to hear how the costs of managing properties just keep going up. And our customers aren’t imagining this; recent data from June 2023 found that in the trailing 12 month period, expenses at multifamily properties grew an average of 9.3%. At some properties, this increase was closer to 15%.
While some of these increases came from rising maintenance, taxes, and administration fees, the number one contributing factor for increased costs came from rising insurance costs.
One major reason for the increased insurance premiums has been the ever increasing base rate for workers compensation insurance for onsite employees. While the nationwide average rate for worker’s compensation is about $1.85 per $100/payroll, for onsite resident managers, that rate can be almost 4 times that amount. In California, the average workers compensation rate for resident managers is $7.22 per $100 of payroll. Even for a property with just 10 employees, an increase like that amounts to increased insurance premiums of about $27,000 a year.
The good news is that you can take proactive steps to lower these insurance premiums by working to lower your E-mod score, or your experience modification factor. For example, in the hypothetical property above, an e-mod score of 0.80 would lower your insurance premiums by over seven thousand dollars.
The undisputed best way to lower your e-mod score is to lower the frequency and severity of incidents leading to a workers compensation claim. A strong onsite security program, like Apartment Guardian’s fully mobile one push panic button, has been proven to both discourage onsite crime as well as reduce serious injury risk.
For more information or to get a quote about getting set-up onsite, reach out to kate@apartmentguardian.com.