16 Key Property Management Trends for 2020
Which trends will change work and business for property managers in 2020 and 2021?
Property management is a booming multidimensional business worth Billions. Improvements and threats will come from many directions and not just property management technology.
When this post was written originally, there was no cancel rent movement, Covid 19, eviction tsunami, or national work shutdown. It highlights how trends and events and chaos can change the course of business. You must be on your toes now, looking ahead.
Trends Can Deliver or Erode your Business Advantage
The top 16 property management trends to watch are dominated by politics, social trends, new software and tech electronics along with all the amenities tenants want. Politics and the economy are the big new stories for 2020, but technology remains the driving force behind property management success.
Keeping on top of industry trends and improving your business should be a priority in 2020. Just being aware of stats, views, opinions and news in the property management and rental markets can help keep you ahead of the crowd.
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Trends Impact the Bottom Line Quicker Now
Trending changes in technology and work processes respond to property manager, landlord and tenant pain points. It’s not the apps, services, etc. that matter. Property managers like yourself are overwhelmed with the financial, regulatory, and workload stress they face every day.
Modern property management software such as ManageCasa evolves to keep these challenges in check. Just using ManageCasa helps you understand your business challenges and how you can ease them.
Owners and Investors Need Your Insight
Property owners and investors in general may not be housing demographic, technology nor customer service experts. Cultural trends and new software technology for instance, are invisible to them. However these will affect demand for their properties or how long they hang onto good tenants.
Your choice of software and apps might have big effect on future rental property portfolio earnings, yet they won’t see these trend “trains” coming unless they’re an avid property management news reader.
16 Property Management Trends 2020
1. Efficiency: Huge reductions in staffing, cash flow, revenues, and rising overdue accounts receivable means having to run a property management business with half the funds.
2. Technology Trends: New cloud services, Internet connected devices, and automated services have arrived and property managers and tenants like them.
Key in the trending tech revolution is cloud based, online property management software. ManageCasa as an example provides a digital foundation for a firm’s property management work. It’s an all in one platform that’s easy to learn and use. Tech doesn’t mean complicated when developers build an amazing work product.
3. Demographic Trends: Millennial tenants are becoming more of the tenant market and what they want often requires high tech solutions. Without that technology, they consider a landlord backward or irrelevant. Landlords as well, choose property management companies based on tech expertise.
Without technology, a property management firm won’t possess the efficiency, competence and capacity to scale up to allow owners to achieve profitability.
4. Rental Market Demand: Housing construction starts are growing again as the economy reopens, and for the next 5 years.
In some cities, rental demand will increase while in other cities, (e.g., San Francisco, Boston, New York, Miami, etc) occupancy rates will fall.
5. Returning Economy and Trade Tariffs: We’ve been through a very difficult time with massive unemployment in Australia, US, UK, Germany and Spain. Short term rentals have been obliterated while these units are converted into long term rentals. The tourism, restaurant, and entertainment sectors may not be revived for another year. Bottom line is that tenants will experience difficulty paying rent.
6 . Government Restrictions: given how high housing prices are and how high rental prices have become in cities such as San Diego, New York, San Francisco and Los Angeles, the cries for rent controls will get louder in 2021. Restrictions such as rent payment and eviction moratoriums will continue as renters struggle with unemployment.
7. New Construction Trends: besides big growth in new construction, and government programs (such as the new $1 billion program in Vancouver, Canada) can impact your future rents and income potential.
Large multifamily buildings are the trend, due to so much pent up demand for units. Big developments near key transit locations will receive priority from government.
8. Interest Rates and Inflation: financing, wages, utilities, and operating costs will rise in 2019 thus cutting into your net income.
9. Software Technology: New software technology is offering improvements in simple accounting, time management, tenant screening, online payment, property maintenance and repair services, and property management analytics. Some offer complete solutions while others are woefully inadequate. Some might impose on your business creating additional costs and adoption issues. Which solutions and apps should you adopt in 2019?
10. Demographic Shifts: Baby boomers are finally retiring and the Millennial generation is out of their parents homes and into renting their own apartments. Your rental products and management style will gradually be reshaped to suit them in 2019.
11. Startup Property Management Companies: We’ve all heard about the growth in accidental landlords. Buying rental income properties is popular and many are realizing there is big money in property management. They will want to get serious about growing their portfolio and formally launching a property management company.These newcomers to property management won’t want anything to do with old PM practices involving spreadsheets, receipts, and check payments at month’s end. No, they’re not trained pros and they’ll want to simplify right away using property management software.
12. Industry Consolidation: Big property management conglomerates are entering the independent property rental market. What are they looking for in properties or in property management companies they’d like to acquire? What services will they offer, e.g., maintenance).
13. Property Management Specialization: Given growing complexity in PM licensing requirements, government legislation, lender regulations, insurance requirements, environmental constraints, and accounting and taxation property management professionals have begun to specialize. Will expertise in any area give you a business advantage? What training and licensing must you obtain?
14. Rental Property Insurance: Changes in legal liability mean more renters should have their own renters insurance, and they will. Similarly, landlords will also need to be sure of their own landlord insurance. Is insurance coverage for them a value add for your company?
15. Digital Amenities including 5G and Free Wifi: Here’s benefits tenants love. It’s for large multifamily buildings or large portfolio managers to either provide free wifi or create it as an affordable option for tenants. Wifi may be the coin operated washing machine of 2019.
16. Smartlocker Storage: We’re in the era of Amazon. Amazon’s growing share of retail shopping is shocking. Tenants will need some way of accepting packages at their apartments, many of which don’t have suitable storage. Smart lockers allow them to pick up parcels when they can. The tenant receives a digital message and unlock code on their smartphone. Yes, another app.
Ever improving technology is the asset that gives property management firms a competitive advantage. Continuously applied it pushes the modern company ahead one day at a time, until competitors simply can’t keep up. It’s death by a thousand cuts.
Please share this epic post on the trends with your real estate associates and friends.
These are just a few trends in property management software to be aware of in 2020. More are coming and we’ll let you know right here. Subscribe to our blog for continuing insight on technology and housing trends.
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