9 Ways to Save on Operations Costs in 2026
Industry experts share smarter ways to lower expenses in the year ahead.
With 2026 fast approaching, apartment owners and operators are bidding farewell to a year in which they were challenged by rising inflation, slowing rent growth and the increasing costs of, well, everything, from insurance to utilities to labor and materials costs.
But industry experts remain optimistic and say that there are still meaningful ways to cut operational costs next year by, among other strategies, rethinking processes, getting multiple bids from prospective vendors and integrating technology such as artificial intelligence into operations.
Here are nine ways apartment operators can save on operations costs in 2026.
1. Marketing Efficiencies
There’s no way to know if your marketing efforts are working without reviewing analytics. Otherwise, you’re spending money on marketing without knowing if your strategies are bringing in new prospects.
Caroline Mills, digital strategy manager for Resident360, said that paid media costs are rising, but that operators still don’t always audit which channels are truly driving leases. “Running quarterly attribution reviews and reallocating the budget toward the platforms with the strongest cost per lease can reduce wasted spend by 15 percent to 25 percent” she said. “In many cases, cutting low-performing ILS placements and relying more on owned traffic sources creates immediate savings.”
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Mills also said that operators shouldn’t just try to attract new residents—they should focus on getting existing ones to renew. “It costs significantly more to acquire a new renter than retain an existing one,” she said. “In 2026, operators can reduce operating costs by investing in resident communication, email touchpoints and reputation management—all of which support higher renewal rates and reduce reliance on expensive acquisition channels.”
2. Leasing
One way to lower expenses is to pass them on to residents. Michael Zaransky, managing principal of MZ Capital Partners, said that in addition to charging residents base rent, he’s adding an additional per-month fee that includes a pro rata share of common area utilities, water, sewer, trash and building recycling charges.
The fee varies based on unit size, with three-bedrooms paying a monthly fee as high as $75 and studios paying as low as $40. “The revenue produced by these extra recovery fees can be significant and substantially offset increased costs while maintaining base rents at current or more modestly increased levels,” he said.
Another way to cut leasing costs is by automating the leasing process, with self-guided tours that allow for on-demand showings and chatbots that engage with prospects 24/7. Bella Campise, co-founder & CEO of Aigentless, said that automating these operations allows leasing teams to regain hours that used to be consumed by repetitive questions, unlocking their capacity for higher-value work like relationship-building and closing. “That’s not just a feel-good benefit,” she said. “It has real financial implications. A better resident experience drives higher renewal rates and more positive reviews, which meaningfully lowers turnover costs and increases organic demand from prospects.”
3. Utilities and sustainability
By cutting utility costs and improving energy efficiency, apartment operators can also achieve cost savings. Jeff Klotz, CEO of The Klotz Group of Cos., said that the company installed smart water submeters and did LED retrofits during the renovation and repositioning of the Surf A1A Apartments in Atlantic Beach, Fla., resulting in annual water/sewer savings of $54,000, or 18 percent. Lighting energy use also fell, by 22 percent. “Simple, high-ROI retrofits in water and lighting still outperform solar or battery storage in payback efficiency,” he said.
The Breeden Co. is also achieving savings through the installation of energy-efficient appliances and smart thermostats, according to Mark Denny, the company’s vice president of property management. “We receive daily high-usage meter reports, enabling us to promptly identify and address leaks or irregularities in real time,” he said.
Sometimes, outsourcing energy-related functions can help achieve savings as well, which AvalonBay Communities has successfully accomplished through its partnership with Parity, a company that optimizes HVAC systems to boost energy efficiency, improve building operations and reduce utility costs. “We started with Avalon Clinton South in Manhattan, targeting properties in markets with building performance standards where both regulatory pressure and savings potential were highest,” said Alexander Heckman, senior director of engineering at AvalonBay. “Since then, we’ve scaled the energy management partnership to 17 communities across New York, Boston and D.C., generating $700,000 in cumulative utility savings without compromising resident comfort or satisfaction.” In 2026, the company will expand the partnership, he said.
4. Property operations and maintenance
Preventive maintenance can help avoid costly equipment repairs and avoid expensive emergency responses—and consolidating and automating preventive maintenance and procurement in a single digital platform can streamline those operations and save staff time.
Klotz implemented an AI-driven work order and vendor routing system that cut average make-ready turnaround from 9.3 days to 4.7 days across the company’s portfolio. The result: $250 per unit annually in saved vacancy loss and payroll hours. “Tech is not just for leasing,” said Klotz. “It’s the invisible force that shrinks maintenance downtime and payroll creep.”
Excelsa Properties is also integrating AI into its daily workflow to achieve savings. “We’ve begun using AI to analyze collections, rent rolls, maintenance logs and utility spend across our portfolio, allowing our teams to identify inefficiencies that used to take weeks to uncover,” said Curtis Holder, director of asset management. “At communities in our portfolio, AI-driven work order routing and preventive maintenance forecasting have already reduced vendor costs and downtime, while automated lease-renewal recommendations have helped staff prioritize the highest-impact tasks. The goal for 2026 is simple: Use data to replace guesswork, streamline staffing and give on-site teams back the time to focus on resident experience, not spreadsheets.”
Utilizing materials that are more durable can also help apartment operators reduce costs. Karen Charde, managing director of Sentinel Real Estate, said that in 2026 the company is upgrading to durable vinyl flooring. Compared to carpet, vinyl flooring reduces long-term maintenance costs, she said. “Vinyl’s resistance to stains and wear means fewer repairs and less-frequent cleaning, resulting in substantial turnover savings.”
5. Insurance and risk management
For personal insurance, savings can be achieved by “bundling” multiple policies with the same insurance company. The same principle applies to commercial policies, and companies that place insurance for multiple communities with the same insurance provider can reduce their premiums. Katie Santarelli, president of Wye River Insurance, Bozzuto’s associated brokerage, said that “the name of the game in insurance is the bigger the better—the more units you insure, the more stable a program you can create.” A master insurance program can save operators money by pooling their risks, she said.
Conversely, some operators report that they’ve had success reducing insurance costs by spreading out their business. John Gilmore, managing director of project and risk management at Hamilton Zanze, said that the company works to secure best-in-class coverage at competitive rates by using a “layered program,” with participating insurers in the United States, Bermuda and the United Kingdom. “Similarly, our liability insurance is sourced from multiple domestic carriers to further drive value for our portfolio,” he said. “Through these efforts, we were able to reduce our premiums by 17 percent in 2025 compared to one year earlier. In 2026, we expect our premiums will decrease again at a similar percentage.”
6. Staffing Needs
Automating routine procedures and encouraging residents to make use of technology can help streamline operations and reduce costs. Sentinel’s Charde said that the company encourages residents to pay rent through online portals and digitizes many administrative processes that reduce paperwork and administrative overhead, leading to payroll savings, greater operational efficiency and more convenience for residents.
Staff sharing is another successful approach. Matt Frazier, founder & CEO of Jones Street Investment Partners, said that the company uses a sister-property approach to create savings. In Danbury, Conn., the company’s Ridgeway Place and Kennedy Flats communities share not only staff but also bulk contracts, which results in significant savings over time.
7. Retention Savings
Savvy apartment operators realize that resident retention is an important way to cut turnover costs and improve NOI. “Every renewal avoids the turnover, repair and vacancy costs that have climbed over the past few years,” said Karlin Conklin, principal, co-president & COO of Investors Management Group. “Higher renewal retention also strengthens the sense of community within a property, which supports better resident satisfaction and reduces future operational strain.”
8. Design and Development
Jeff Kayce, managing director of Bozzuto Development Co., said it’s challenging to reduce costs in an environment where most costs in the apartment industry are escalating. But Bozzuto’s “One Bozzuto” unified approach helps the company achieve savings because any apartment project incorporates not only development but also construction and management, all in-house. “Before we break ground, we make decisions in concert with the operator and the builder,” he said. “It leads to higher programmatic efficiencies and construction details that are most opportune for efficient operation.”
Another way to reduce expenses, according to Kayce: focusing more on quality than quantity when it comes to common areas–“not just trying to build more space or check more boxes, but have a truly high-quality experience the minute you walk in the front door.”
9. Thoughtful Vendor Selection
Getting competitive bids when contracts are renewing is one way to help reduce vendor costs in 2026. Another way is to use the same vendors across multiple properties.
“At the corporate level, we strategically negotiated vendor contracts in bulk, allowing us to leverage economies of scale and reduce overall operating expenses,” said Breeden’s Denny. The result: Landscaping costs for 2026 are projected to decrease by 7 percent compared to 2025, and pool maintenance costs will decline by 15 percent year-over-year.
Bringing more functions in-house is a powerful way to reduce operational costs. Conklin said that Investors Management Group is adding regional maintenance positions to complete more work in-house. “The goal is to limit outside labor, reduce material markups and accelerate turns and preventive maintenance,” she said.
