Knowledge Base
Expense Benchmarking
Expense benchmarking is the practice of comparing a property's operating costs — usually normalized per unit — against industry surveys, portfolio peers, or its own history to identify categories where spending runs above the norm.
How expense benchmarking works
Benchmarking normalizes spend so properties of different sizes can be compared — usually per unit or per square foot — then lines the result up against three references: the property's own history, sibling properties in the portfolio, and industry surveys. The National Apartment Association's 2024 data, covering more than one million units, put total operating expenses at $8,657 per unit and R&M at $1,098. A property running far above those anchors has a question to answer; a full walkthrough of the method is here.
What benchmarking can and cannot see
Benchmarks find the category; they cannot find the cause. A property can benchmark high on R&M because of an aging chiller, a heavy storm year, or three years of unchecked vendor prices — the per-unit number looks identical in all three cases. Worse, a property can benchmark normally and still overpay, because survey averages include everyone else's overpayment too. The step after benchmarking is line-item pricing: reading the actual invoices and checking each purchase against market. That is the sequence The Benchmark runs each quarter — and on average it surfaces $22,546 in annual savings for a 200-unit property.
Common mistakes
Comparing across markets without adjusting for taxes, labor costs, and asset age produces false alarms and false comfort in equal measure. Benchmarking once, instead of on a schedule, catches a snapshot but misses drift. And stopping at the category level converts benchmarking into a reporting exercise: the number gets flagged, discussed, and re-budgeted, while the underlying prices never change. A benchmark that never triggers an invoice-level review has not saved anything yet.
Related terms
Start with one property and one quarter
Send us a quarter of invoices and we will show you what it should have cost. If there is nothing there, we will tell you that too.
