Mitigating lost income requires proactive leasing and renewals, dynamic pricing, effective marketing, and exemplary resident relations. However, reducing expenses can be more complex than other mitigation strategies, as owners must find ways to cut costs without sacrificing quality or resident satisfaction. 

Here are seven essential tactics to reduce both controllable and noncontrollable operating expenses with a multifamily property:

PREVENTATIVE MAINTENANCE 

Preventative maintenance can catch failures before they happen. The earlier nonperformance or underperformance can be detected, the better. Nothing is more important than routine exterior, roof, gutter, plumbing, appliance, HVAC, and landscaping inspections and repairs. As the common saying goes, “An ounce of prevention is worth a pound of cure.” 

BULK PURCHASING & VENDOR NEGOTIATIONS 

Bulk purchasing is when a consumer buys large quantities of a product at once for a lower cost per unit. Bulk supplier purchasing allows property owners to reduce expenses and leverage economies of scale. [1] One clear example is when consumers choose wholesalers like Costco and Sam’s Club over retail chains like Walmart and Target. If you’re throwing an event with 50+ invitees, buying in bulk can save on the cost per unit of party supplies (paper plates, paper cups, utensils, etc.). The same is valid for apartment buildings. Oftentimes, cutting costs requires the art of negotiation. Some live by the credo “negotiate everything,” but conducting due diligence, analyzing supply data, and researching the market will make negotiating more effective. You could potentially save substantial amounts by asking for lower pricing from vendors on appliances, furniture, fixtures, etc. [1]

IN-HOUSE VS. THIRD-PARTY SERVICES 

A third party refers to persons or entities outside the primary party. In the case of commercial multifamily real estate, a third party could reference a property management team, development company, or maintenance team that is a part of an investment, deal, etc. Vertical integration strategies can make the handling of day-to-day operations less burdensome while also reducing expenses. To streamline its operations, a vertically integrated company takes direct ownership of various stages of production. Instead of outsourcing and relying on external contractors or suppliers, these companies acquire suppliers, distributors, manufacturers, and any other third party they need to support the deal. For example, vertically integrated property management would rely on an in-house maintenance technician trained to handle HVAC systems rather than calling an outside HVAC contractor for a routine repair. This approach eliminates costly third-party service calls, reduces response times, and gives the property team more control over scheduling and quality. Over time, trained technicians can save thousands of dollars annually in service fees, especially across large properties or portfolios. 

ENERGY-EFFICIENT APPLIANCES 

Energy-efficient appliances can significantly lower utility bills for residents and property owners. You can also take satisfaction in knowing you’ve minimized your environmental impact by decreasing your carbon footprint and reducing greenhouse emissions. Energy-efficient appliances are called such because they contain optimized components. For example, an energy-efficient refrigerator saves energy through improved insulation, adequate temperature management, and efficient electricity and water use. 

ECONOMIES OF SCALE (SHARING RESOURCES) 

Economies of scale refer to an economic principle referring to cost advantages that a business can achieve due to expansion. Similar to the bulk purchasing model, with greater quantities come lower costs. Economies of scale can be a resource-sharing principle where production volume necessitates strategic allocation. In multifamily real estate, shared management/administrative tasks and unified marketing strategies across properties can lower operating costs and provide a better return on investment (ROI). [2] For example, a small multifamily property may not generate enough revenue to support a full-time leasing agent. However, suppose a nearby property of similar size is under the same ownership or management. In that case, the two properties can share a leasing agent, splitting the cost of the salary and overhead. This approach reduces staffing expenses and ensures that leasing is handled professionally with less financial strain on the individual property.

AUTOMATION & SOFTWARE TOOLS 

In 2023, Zillow reported that 67% and 51% of residents preferred to apply for a rental and sign a lease online, respectively. [3] That same year, it was found that 60% of residents typically pay their rent online. [3] As of 2025, more than half of the residents prefer to pay their rent online. [4] Automation in property management has become an essential tool for property owners, management teams, and residents. Increased convenience means minimal effort for residents, and online payment portals present the opportunity to withdraw payments automatically, reducing the risk of delinquent rent. Introducing software tools doesn’t begin and end with rent; maintenance teams also benefit from residents being able to submit service requests online. Property management uses the same technology to optimize resident screening, perform background checks, confirm finances, and more. On the back end of the business, implementing comprehensive property management software can help owners methodically keep track of market trends, streamline operations, and utilize AI-driven interactions with residents to boost engagement. [5] Companies like AppFolio, Entrata, Yardi, and RealPage all support the innovation of automated management systems. 

CROSS-TRAINING STAFF 

Cross-training employees involves providing them with a broader range of skills, increasing their job flexibility, and improving their overall adaptability to changing work demands within a company, making them more versatile and valuable. [6] Knowing this, a leasing consultant who is also skilled in identifying maintenance needs can save the company money by proactively addressing concerns rather than waiting for someone to arrive and assess them later. Similarly, a property manager with certifications beyond their standard day-to-day role can perceive ways to reduce expenses and achieve passing scores during an inspection, alleviating property owners and ultimately saving the company money.

WORK WITH BAM CAPITAL FOR MULTIFAMILY REAL ESTATE INVESTING

As the foundation of any owner/operator or sponsor’s business plan, operational expertise demands the highest-quality resources and results. BAM Capital is a vertically integrated owner/operator that partners with accredited investors who want to enjoy passive income and all the other benefits of multifamily private placement. As the private equity arm of The BAM Companies, BAM Capital has been focusing on buying the most profitable assets and staying disciplined in its investment thesis. BAM Capital’s investment strategy aims to create forced appreciation while mitigating investor risk. To date, the brand has successfully managed over $1.7 billion in assets across ~9,000 apartment units.

Remember that no investment is risk-free. Before making financial decisions, consult your investment advisor and schedule a call with a BAM Capital investment team member.

Disclaimer: All investments carry risk, including potential loss of capital. This content is for informational purposes only and is not financial, legal, or investment advice, nor an offer or solicitation to buy or sell any security. Consult an independent advisor for personalized guidance and contact BAM Capital for details on current offerings. BAM Capital and its representatives are not fiduciaries or investment advisors. The information provided is general and may not reflect individual financial goals. Any financial terms, projections, or forward-looking statements contained herein are hypothetical in nature and should not be interpreted as guarantees of future performance or safety. Such statements reflect Bam Capital’s opinion and are subject to market fluctuations, economic conditions, and investment risks. Past performance does not predict future results. BAM Capital and its affiliates do not guarantee the accuracy or completeness of this information. Bam Capital offers investment opportunities under Rule 506(c) of Regulation D exclusively for accredited investors as defined by the SEC. Verification of accredited investor status is required prior to participating in any investment.

© 2025 Bam Capital. All rights reserved.

SOURCES:

[1]: Linkedin. (2023). “How to get the most value from your suppliers in multifamily property management.” https://www.linkedin.com/pulse/how-get-most-value-from-your-suppliers-multifamily-tim-safransky-cpa 

[2]: Google Generative AI. (2025). “Examples of economies of scale in real estate.” https://www.google.com/search?q=examples+of+economies+of+scale+in+real+estate

[3]: Zillow. (2023). “Renters: Results from the Zillow Consumer Housing Trends Report 2023.” https://www.zillow.com/research/renters-consumer-housing-trends-report-2023-33317/ 

[4]: PYMNTS. (2024). “Property Management Report Shows Over Half of Tenants Pay Rent Online.” https://www.pymnts.com/news/faster-payments/2024/property-management-report-shows-over-half-of-tenants-pay-rent-online/#:~:text=Property%20Management%20Report%20Shows%20Over%20Half%20of%20Tenants%20Pay%20Rent%20Online&text=In%20the%20expansive%20rental%20market,opportunity%20to%20boost%20tenant%20satisfaction. 

[5]: MRI Real Estate Software. (2024). “How to automate property management in multifamily properties: Essential strategies and tools.” https://www.mrisoftware.com/blog/how-automate-property-management-multifamily-properties/#:~:text=Real%20estate%20automation%20uses%20technology,enhances%20efficiency%20and%20tenant%20experiences. 

[6]: Google Generative AI. (2025). “How does cross training benefit employees?” https://www.google.com/search?q=how+does+cross+training+benefit+employees