How Has the Pandemic Fast Forwarded Property Management Services?
Landlords and property management companies are on the front line of the Covid 19 pandemic and many are suffering financially and personally, while others are okay.
Despite the pain many some apartment landlords have experienced, most in the industry have developed a newfound respect for their role in the community and their local economy.
Most are much more aware of their role, importance, as well as their rights. And more landlords and investors are aware of the risks of being in the property management business long term.
Looking Ahead to 2021
And now as we move closer to the end of the pandemic, property management companies are looking ahead to understand how they can grow their portfolio of clients and properties, raise ROI, scale-up and shape services, to build a market-leading brand.
Many property management companies do see growth in their future, while others feel the pandemic setback may continue for some time (rents not paid, continuing rent default, and perhaps not collectable). Expectations of future rent revenues are down a little, but for those renting houses, the market looks very bright. House rentals yields are impressive.
They’re optimistic but recognize the challenges ahead.
What’s Caused Changes in Property Management?
- reduced rent revenues and darkened outlook for apartments
- late rent payments
- shifts in populations and rental housing demand — to house rentals
- the work from home revolution
- lower fees expected by landlords – property managers expected to do more with less
- technology bringing workflow efficiencies – automating everything
- pandemic crisis opens property management up to new business models
Economic and Cultural Shifts
As tenants have struggled with rents, and renters in the cities have dropped their leases and moved out to the burbs and beyond, and as legal rules have imposed themselves on property management services, property management will be tough in early 2021 (no stimulus).
With few protections for rental property investors and businesses, the industry has had no choice but to adapt, survive and evolve.
Landlords and property management businesses have responded by:
- being patient and sympathetic with tenants who struggled to pay rent or paid late
- remaining composed while governments offered meager support for property owners
- launched online payment services for tenants
- improved digital services to add value to properties
- enacting Covid 19 prevention protocols in tenant buildings and relations
- adopting property management software solutions to streamline service and conduct business in a more health-conscious way
- by being more transparent about their business to ensure the public understands the challenges for investment and property management businesses
2020 is a turning point for many property management firms. They’ve evolved quickly to adopt and leverage the power of technology.
Despite the devastation of the pandemic, property management companies have thrived into the summer and fall seasons. Profits are up overall for many (single-detached home market) and many managers are optimistic about the future.
Property Management Surveys Indicate
New surveys show managers expect slower growth in properties serviced in the next few years. And some expect their portfolios to shrink. And with diminished rents and rent payments in default, they are unable to consider growing their businesses.
Companies looking for portfolio growth appears to have decreased. It could be they’re struggling with efficiency, services, staffing, technology, and workflow improvements. They feel they have all they can handle and aren’t looking for growth.
However, as more become aware of how new property management solutions simplify work and reduce workloads, they may get back into a growth mindset. As the pandemic eases, rent defaults will diminish and the economy will likely surge forward.
Demographically and in terms of wealth in the USA for instance, there is demand, even pent-up demand for houses and rural rental properties. More new houses are being constructed which translates to house rental opportunities in 2021. That’s the hot market. Higher immigration will increase demand further. Property management company owners will see these opportunities.
As some property management firms go out of business or are acquired by others, the remaining thriving firms will be able to grow. It makes sense to plan for growth now.
4 Property Manager Plans:
- find owners with great new properties (e.g., houses in rural/suburban areas, new construction, build to rent, and low rise buildings which will likely return in demand)
- drop losing properties (multi-family, apartment buildings, those in the inner cities, resource-intensive properties)
- acquire new properties where digital amenities can help them charge higher rents
- acquire properties in other cities and manage remotely
Adding Value to Properties
Rather than being passive, some property managers are researching ways to add value, rather than manage traditional maintenance tasks and rent collection duties.
This means adopting technology and offering additional services. These new business models create niche services that tenants want. By separating them in the service menu, those willing to pay a premium price for them will.
By segmenting services, just as Airlines have segmented passenger seating, we’re creating new price points and customized services for all tenants. The potential revenue is much higher.
And outdoor amenities are just as desirable, although costly to maintain. Acquiring the right kind of tenants solves the problem of financing or maximizing revenue.
Examples of other cool new revenue-generating ideas include:
- referral programs for anyone who generates property management leads
- tenant screening, legal advice,
- setting up an automated accounting and online payment system for landlords
- offering tenants benefit packages which could include digital services, UV air cleaners, renters insurance discounts, and one free upgrade to fixtures/appliances per 2-year tenancy lease
- digital amenities such as 5G service and Wifi
- parking spaces, storage, outdoor hot tubs, pet friendly (extra fee)
- appliance upgrade package with agreed rent price and a 2-year lease
From cost savings via property management software to extra amenities you can charge for, there are plenty of ways to raise landlord ROI and generate preference for your property management services. Rising to leader status as the premier property management company in your city is not so far fetched.
It won’t take long for you to get noticed for your advanced and more profitable management model. Landlords will love how creative you are and that you’ll likely find a way to make their properties more successful.
We may look back on the Covid 19 pandemic as the launchpad for a more successful business. It sometimes takes these events to shake us up and help us do the right things.
Find a Property Management Services provider near you: California Property Management, Arizona Property Management, Florida Property Management, Hawaii Property Management, and Illinois Property Management.
More Landlord Tips: Property Management Software | Landlord Software | Apartment Management | California Property Management Companies | Cloud Property Management | PM Software | Rental Software for Landlords | Mobile Landlord | Landlord Tips | Free Property Management Software | Bookkeeping for Landlords | Landlord Leads | Landlords Insurance | Tax Deductions for Landlords | Landlord Apps | Landlord Laundry Solutions