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Parking Management Software ROIInvestigating the ROI of parking management software
With parking being one of the largest drivers of ancillary revenue at multi-family properties, it's imperative to get it right. But just how much return can you expect from parking management software? Read on to find out.
Boosting ancillary revenue is often a major focus for property managers and owners alike.
Especially given that the baseline forecast for rent growth is slightly lower this year than average (2.5% versus 2.9%), properties are increasingly looking for ways to raise their bottom line without compromising the quality of living for their residents.
One often overlooked but significant opportunity lies in parking. If managed well, it’s a potential treasure trove for additional revenue. But that’s only if it’s done well.
Parking tends to be one of the biggest thorns in the side of a property manager. Because traditional systems — like spreadsheets and rentable items — are not built to handle tenant parking efficiently, teams aren't able to reap the full benefits parking has to offer as an ancillary revenue source. As soon as a team makes the decision to invest in a proper parking management system, the benefits often more than pay for themselves.
In this guide, we will explore those benefits, touching on both the financial and operational upside of a solid parking management strategy.
We’ve combed the data from all of our clients to identify the exact numbers to prove that there truly is ROI in parking management systems like Parkade.
Understanding parking management
Before we dive into the numbers, let’s first establish a baseline of what exactly parking management entails. As any property manager will tell you, it involves much more than just hanging a tag on a resident’s car and calling it a day.
The key components of a parking management system are:
- A system of record to track parking assignments, lease lengths, vehicle details, and parking prices, ideally integrated with your PMS.
- An enforcement strategy that ensures parking rules are clear and establishes consequences (typically fines or towing) when someone breaks them.
- A method to pay for parking, whether it’s bundled in with rent (which we don’t recommend) or paid for in a separate system.
- A self-serve system for residents and guests to book long or short-term parking.
- If there is a gate on the property, provisioning and deprovisioning of gate entry should also be considered in the parking management strategy.
The old-school way of addressing these needs isn’t cutting it anymore. Many properties are still using manual processes, like an Excel spreadsheet, rentable items, or even a physical piece of paper to keep track of their parking.
And far too often, properties are relying too heavily on staff members to handle parking matters that take up a significant amount of time, like enforcement or guest parking.
Moreover, there’s one point that just can’t be ignored: If you’re still using old-school parking management systems like spreadsheets and rentable items, you’re leaving money on the table.
So the parking management we’re discussing here that delivers positive ROI is a technology-led solution that automates all aspects of parking operations, improves resident experience, and unlocks new revenue streams.
Setting the stage: Residents value good parking
Delivering on resident expectations should be a main priority for any multifamily property, and parking is one area of the resident experience that is especially critical to consider here.
65% of property managers cite parking as a top concern among residents. Whether it’s for existing residents or prospective residents, providing a simple, reliable, and flexible parking solution has a direct impact on the success of your property.
Part of this is due to reputation. Properties have reported a 44% increase in their reputation scores after fixing their parking problems. And this boost in a reputation score can trickle into several different areas, boosting not only the number of new residents, but also leading to more renewals from existing residents.
But we know you want the hard dollar amounts, so let’s talk more about some real-world outcomes that Parkade's parking management software delivers.
So, what do the numbers say about the ROI of parking management software?
Long-term net parking revenue for stabilized buildings
Once properties implement a system to help them optimize pricing and management of long-term parking, they see immediate gains in their long-term parking revenue. The average 6-month increase in net long-term parking revenue for the cohort of 7 properties we sampled was 24%, translating into thousands of extra dollars.
Long-term net parking revenue for lease-ups
Better parking management also empowers properties to far outperform their projected revenue from long-term parking when they’re in the lease-up phase.
On average, properties from the cohort we sampled estimated that they would bring in $15,925 on average from long-term parking revenue per month. But thanks to Parkade helping them optimize their parking strategy, better enforce their parking rules, and keep a better record of who is parking where, the average revenue from long-term parking was $23,450 on average, which is a 47.3% increase from the estimates in their pro forma.
Total net parking revenue for stabilized buildings
For buildings that are already at full occupancy, the average increase in parking revenue sits at 31% once they implement Parkade’s parking management solution.
Revenue metrics for lease-ups
The best time to implement new parking management systems is at the inception of the building. Getting parking right from the beginning ensures that you are maximizing total parking revenue from day one, as well as establishing a positive reputation around parking. Many properties underestimate the revenue from long-term parking and may often leave out potential short-term parking revenue altogether.
When a few properties we worked with during this phase were estimating parking revenue at the start of their lease-up, they estimated around $35,000 on average. But the results, since they decided to go with Parkade right from the start, blew those numbers out of the water. In reality, they were able to bring in closer to $58,000 on average, which is a 66% increase from the estimates.
Short-term parking: An opportunity
The boost in revenue continues to be apparent when you zoom out to look at short-term parking, too. Short-term guest parking can be one of the most underutilized revenue streams, and represents a huge opportunity for multi-family properties to tap into. However, it's historically been very difficult or impossible for properties to see this revenue without parking management software that automates the process.
Especially in popular areas, like city centers or near shopping malls and sporting arenas, there’s often a high demand for short-term parking. When properties put a system in place to monetize this guest parking, they can unlock hundreds or even thousands of extra dollars per month.
Automating guest parking
Without a good system in place to manage parking, many properties often leave guest parking as a free-for-all (meaning they don’t make money from it), or if they do attempt to monetize guest parking, it turns into a massive beast to handle.
Erica, a property manager at Thrive Properties, told us about her pre-Parkade experience with guest parking, preventing them from delivering on a key resident need: “There was no world where we were doing short-term parking by the hour or even by the day because there was just no way to manage that.”
If you have a complicated or inconvenient system for guests to reserve parking, especially one where they have to walk into the office during office hours, guests are often more likely to try to get away with not paying for parking. (And if you don’t have a great system to enforce parking, they may very well get away with it).
With the right parking system, you’re able to give guests a flexible, 24/7 solution, removing any previous barriers that may have caused them to break the rules out of convenience.
Maximizing guest parking availability
Another way that manual parking management may stand in the way of effectively monetizing guest parking is the inability to accurately track how many spots you have available for guests to reserve in the first place.
Taylor, the property manager at Strata and Venue, shared her experience of desperately needing more guest parking and discovering they had a full 50 more open spots than they thought.
“We actually had way more spots that we could have used for guest parking, but we didn’t know that because of the way we were using our parking system. Not to mention, we wouldn’t have the system to leverage them without a Parkade.”
When your parking management system gives you an accurate, real-time view of available spots, you can leverage guest parking to its full capacity.
Utilizing idle parking spots
A reliable parking-management system also allows you to make the most use of every single spot available. With technology that uses smart inventory management, properties can release idle or unassigned parking spots into the system for short-term use. So spots that would have otherwise been sitting empty between leases can suddenly be leveraged as an extra revenue-generating spot in the meantime.
Net revenue for short-term guest parking
When properties have a great system to implement paid guest parking, without putting too much strain on their staff, they immediately see a boost in revenue.
They’re able to turn an operation that was perhaps bringing in no money — or some revenue, perhaps at the expense of staff time — into a significant revenue source with little-to-no staff involvement.
On average, Parkade customers experience a 303% increase in their guest parking revenue after Parkade fees. And there were some properties that saw almost a 400% increase.
Opex (operational expenses) savings
When handled manually, parking management can steal hours from on-site property management teams every week. Between fielding requests or complaints from residents, tracking down parking records, walking the lot to enforce rules, handling guest parking, and manually inputting rentable items, parking can quickly balloon into one of the most time-consuming tasks for staff.
Parking management software can automate away a lot of the most tedious aspects. For example, Parkade gives residents self-service access to reserve and pay for parking (while allowing for any rule sets the property wants to enforce), provides hands-off enforcement support, and even automates gate access via the app so that teams don’t have to worry about distributing or replacing clickers.
Properties have seen that the time teams no longer spend on parking leads to a direct decrease in operational expenses. As a result, they can redistribute those team members' time to more meaningful tasks.
On average, we’ve seen properties decrease their operational expenses by $60,000-$100,000 from savings on parking operations alone. This means that they were able to save what’s equal to a full-time employee’s salary.
Annual NOI improvement
All of the revenue metrics mentioned up until this point have been after Parkade's fees.
When you roll everything up together — both the increase in revenue (after fees) and the opex savings — investing in parking management software has an incredibly positive impact on annual Net Operating Income (NOI).
Whether teams are looking to calculate their property value, secure financing, make operational decisions, or pitch to investors, NOI is one of the most critical numbers to boost.
By coming at NOI from both sides, in terms of opex savings and revenue generation, parking management technology is extremely low-hanging fruit when it comes to boosting NOI.
At the Parkade properties we surveyed, teams saw anywhere from a $66,000 to $126,000 improvement to their net operating income from parking alone.
While parking may not seem like it deserves to be the biggest priority for many properties, the numbers tell a different story. By investing in a proper parking solution, properties are able to significantly improve upon all of their business goals, whether it’s boosting revenue, streamlining operations, improving resident experience, or all of the above.
About Parkade
Parkade is the #1 parking management software for multi-family buildings. With our resident-facing app and staff dashboard, parking runs itself. Your team will boost revenue, reduce time spent on parking, and improve experience for residents and guests, all without lifting a finger.
Explore our features below, built for communities just like yours.
Resident Parking
Seamless Visitor Parking
Gate Integration
PMS Integration
24/7 Enforcement
Custom Parking Rules
Revenue Management
Public Parking
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