How operators are using retention, amenity data and ROI scrutiny to protect NOI as insurance costs rise.
April 21, 2026, 3:47am by Jeff Lail
News > Contributors > Contributor’s Piece (87)
Costs are climbing faster than many operators expected, and teams are actively trying to figure out how to keep up without creating new problems in the process.
The Federal Reserve Bank of Minneapolis found that more than half of all operating expense (OpEx) inflation since 2020 ties back to property insurance, with premiums roughly doubling between 2021 and 2024. At the same time, rent growth has slowed in many markets, so passing those costs on to residents just isn’t as simple as it used to be.
For years, the playbook was simple: raise rents when possible, cut where needed, and delay anything nonessential. That approach held up when demand stayed strong and residents had fewer alternatives. But that’s not the environment operators are working in today, and leading with cuts usually creates bigger issues than it solves.
The problem with cutting your way to profitability
When budget cuts start to show up in the resident experience, renewals drop. That leads to higher turnover, and the cost of turning a unit quickly erases whatever savings you thought you were creating.
According to the National Apartment Association, over half of property management firms report average turn costs between $1,500 and $3,500 per unit, with 20% coming in even higher. Across a portfolio, that adds up fast.
Operators see it play out in real time. You pull back in one area, something else slips, and now you’re spending more to fix it than you saved in the first place.
That’s why the conversation is shifting from what to cut to what’s actually worth keeping. But you can’t answer that without data.
