Efficiency Will be Hot in 2021
If you had a crystal ball, or read the Managecasa blog regularly, you might see the future of property management.
Property managers must achieve more profit and do more with less funds, time and other resources.
In fact, via the pandemic, you’re likely feeling the pressure of more work, less cash flow, and old school micromanagement you just can’t get freed from. Efficiency is the issue for everyone. And there is a solution.
Why is that managers aren’t focusing on efficient systems? Likely because they aren’t sold on the benefits which haven’t fully sunk in. We have to put the focus back on the benefits of business efficiency.
See the 9 top ways you can manage properties efficiently
According to a Stockhouse research paper, using Zillow Data, “the average profit margin for a rental unit is 6.4% — less than half what it was five years ago. – An estimated 53.8% of rental income is typically spent just on fixed costs of property ownership that landlords are responsible for (mortgage payments, property taxes, maintenance, insurance and capital improvements).“
With the rent moratorium extended in the US to the end of the year, it is 4 more months of lower income and cash flow for many property owners. Will renter aid have to flow as long we don’t have a vaccine?
Efficiency Through Technology
Fortunately, the value proposition of an online efficiency solution such as ManageCasa, is that it’s an all in one business foundation, not just a task management tool. From finding profit and reducing losses, editing leases, to making rent collection a breeze, to automating your accounting, ManageCasa is an efficiency platform.
Good Software Makes it Painless
Efficiency might have suffered a bad reputation in previous eras, but technology has changed that. Property tech is taking the tedium and stress away and streamlining operations. It is making property manager’s workdays simpler, returning profitability, and opening the door to new property management opportunities. And landlords do like efficient property managers, even in the single house rental market.
Multifamily is in Tough for a Few Years
Multifamily reports high rates of partial or full rent payments from their renters this summer. However, most data might suggest multifamily is in for a rough road ahead. Preference for houses, lower density units, an elevated unemployment rate, vacancy rates high, and government aid becoming less available for renters to acquire, means multifamily, at least in the low rent sector will need efficiency gains.
And property management companies servicing the apartment and multifamily sectors will need to be better at everything they do. From tenant screening, to vacancy advertising, to rental property accounting and tenant management, property managers will need to streamline all operations to meet budgets that have already shrunk.
As service contracts come up for renewal, terms, owner expectations and profitability will change.
Single Family Rental Housing is Huge
Over in the single family house rental sector, the situation is rosier even though management costs are higher. Rents in this sector are rising along with the demand for rental houses — particularly in the small, rural towns where mobile “work at home” workers are fleeing to. The migration is a big deal in New York and California and is supporting the housing markets outside of NYC and the Bay Area.
It’s driving new property management lead opportunities in cities across the country.
And demand for single family homes is solid. Many Millennials want to buy yet can’t because of huge downpayments, lending restrictions, debt, or low credit ratings. They will still desire to be in a home in less dense neighborhoods and many are raising a family.
Rental home companies and private landlords are competing for available new builds and resale houses that hit the market and it’s driving sales prices and house rent prices up.
Excellent return on investment will be there for investors in single detached home rentals. With interest rates so low, the carrying costs are minimal, and rents are rising. Equity combined with big rental income is as good as it gets, given the stock market may offer lower returns from now on.
As the economy accelerates this fall and in 2021, the demand for house rentals will only steepen.
Managing Single Detached Homes
Yet single family rentals are tougher to manage. Houses need more upkeep than simple apartments, are subject to more local bylaws, and take longer to perform inspections maintain due to geographic distances.
So, if you’re about to buy property, or you’re starting a property management company, you may be venturing into single detached homes or townhouses.
9 Key Benefits of Focusing on Software Aided Efficiency
- using cloud based property management software – to manage properties and help your staff work as an effective streamline unit
- using the software to keep all parties in the loop – about the status of maintenance, repairs and outcomes
- mobile managing — being where you need to be, instead of not attending matters because of distance
- accounting automation – automating accounting and banking transactions
- online rent payment – letting tenants pay online or to automate rent payments
- virtual showings – save time with inquiries and rental prospects by showing virtually which can eliminate those who really don’t like the property or neighborhood
- work scheduling (contractors) – automate scheduling via software and ensuring everything is executed on time
- reduce paperwork – paper leases, invoices, receipts and more can be digitized and edited online
- use tenant portals to keep tenants focused (direct communications) – reduce time waste in conversations and fielding irrelevant questions, and letting tenants educate themselves
Suffice to say that efficiency comes from good communication and reducing your work to its essential core. One of the keys to this efficiency is the effect of “downloading effort” to contractors and tenants. This helps to encourage them to be efficient, follow through, and be accountable for resolving issues.
Of course, their experience is better because everything is more transparent, which creates less confusion and questions. Get things done once and done right. I think a lot of property managers would agree that would make their day.
To manage your properties better, you’ll enjoy using a product designed to help house rental managers. All the tasks you need to cover are a breeze using ManageCasa.
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