As a real estate investor, keeping your finger on the pulse of the most important property management trends can deliver valuable insights to drive your portfolio growth in the real estate industry. By utilizing technology in property management, the boundaries are removed between tenant and property manager and a property management company and owner.
The top tools offer easy-to-access, real-time data on each of their units. Adjacent tools in the property manager’s toolbox empower tenants and streamline common property management processes such as filling vacancies and completing service requests.
At the same time, demographic shifts in the rental market are driving change in the rental market itself. These forces will contribute to where the best place to buy rental property is and continue to inform how effective property managers need to evolve to meet the needs of current renters and appeal to the next generation of renters entering today’s market. Utilizing smart technology to enhance convenience, property managers can help attract high-quality potential renters and drive down vacancy rates. As the industry is changing, you will need to also be a successful property owner. Our team at Great Jones provides property management in a number of high yield real estate markets. From handling property management in San Antonio, TX to property management in Charlotte, NC, we’ve seen and done it all and have developed the operational efficiencies at scale to prove it. This is why we invest in proprietary tools and technology to better serve our property owners, their residents, and the preservation of their assets. Keep reading for landlord tips and trends to keep an eye on.
Embracing New Property Management Tech
New technology is set to revolutionize the property management industry, and these impacts are already being felt. A proliferation of mobile apps and self-serve platforms designed to manage and track daily property management activities like delinquent rent, maintenance requests and management, and more are being used to meet tenant demands, increase retention, and improve communication between parties.
New property management technology allows for streamlined tenant work order requests, and even speedier work order assignments so repair vendors can automatically be paired up with jobs and property managers can confirm the work was completed. By streamlining these processes using technology, tenants, property managers, and real estate investors gain greater visibility into the work order process on-the-go.
Many property managers are also meeting the needs of tenants by offering flexible payment options for their rent and utilities. Options such as Zego, powered by Paylease, allow tenants to make cash payments at select retailers like Walmart, offer convenience for tenants. At the same time, electronic and mobile payment options will continue to be attractive for millennials and Gen Z renters, while keeping options like cashier’s check and money order will better fit those renters who are uncomfortable carrying cash around or entering their payment information online.
For real estate investors, effective property management will also increasingly include the use of technology in the relationship between property managers and landlords. Using data-driven analytics, these tools will provide investors with more accurate, real-time data about their properties’ financial performance than ever before. At the same time, investors can more effectively stay in-the-loop with their properties, including being able to approve and monitor repairs and work orders for their properties on-the-go.
Landlord Insurance, Renters Insurance, and Security Deposits
One trend that is sure to continue to grow is the layering of safety nets for both real estate investors and tenants. An increasing number of real estate investors are relying on landlord insurance policies to provide additional peace of mind and protect their investments.
If you aren’t familiar with them yet, landlord insurance policies offer coverage for property damage, lost rental income from things like mold or pest infestation, and liability protection if a tenant incurs an injury due to a maintenance issue.
The benefits of these policies for real estate investors can be enormous, and policies can be customized with additional levels of coverage. For example, if your rental is in a flood-prone area, you can augment your landlord insurance policy with additional flood insurance as an added layer of protection. The ability to target insurance coverage is particularly beneficial for multi-property investors who have unique needs at each unit.
One thing to note about landlord insurance policies is they tend to have lower premiums for properties with long-term tenants and higher premiums for properties with faster turnover. The logic for insurers is that tenants in short-term rentals are less likely to notice routine maintenance issues and more likely to have an accident or problem in an unfamiliar house.
Alongside landlord insurance, expect the requirement for tenants to carry a renter’s insurance policy to continue to rise. Renter’s insurance can help protect your tenant’s personal effects in case of an accident. These policies tend to be very affordable, and offer an additional layer of security for tenants.
The end of the last decade saw an increasingly competitive space for securing long-term, high-quality tenants. For multifamily housing developments, the availability of attractive amenities will continue to be a powerful force for attracting tenants. Amenities catering to burgeoning families, such as day-care centers or fitness centers with child-care rooms, or community movie theaters are becoming increasingly common.
Amenities catering to busy young professionals are also becoming a way to attract both Millennial and Gen Z renters. These include on-site conference rooms and business centers with workstations and internet access, which will attract remote workers.
Increasingly, cultivating a sense of community is becoming the central purpose of many amenities. Shared spaces with multiple entertainment options, such as community pools with adjacent lounges featuring cooking areas, gaming tables, and multiple TVs create dynamic gathering spaces that are attractive to young professionals and families. Community sponsored classes, such as wine and paint nights, yoga, or community movie nights, are also increasingly popular.
Expect resident amenities to track closely to shifts in the larger retail space. Among the biggest factors that will impact property management is creating a package management system for their residents. Multifamily developments are beginning to incorporate smart locker systems to accept and hold packages for their residents. This corresponds to an ever-increasing volume of packages stemming from the boom in online retail shopping that occurred over the last decade.
As mobile-shopping becomes more common, property managers will need to adapt to an even higher volume of packages. If left on doorsteps, those packages are attractive for would-be thieves, so the security that package concierge services offer residents will be a major selling point. At the same time, as grocery delivery services increase in popularity, property managers will need to offer refrigerated smart lockers for grocery pickup for their busy, professional residents.
The Changing Rental Market
The next decade will see the rise of the Gen Z renter. According to the Pew Research Center, Millennials include anyone born between 1981 and 1996, so currently individuals between 24 and 39 years old. Gen Z is currently being defined as individuals born between 1997 and 2012, or between the ages of 8 and 23 currently.
Generation Z is more diverse than any previous generation. Gen Z, unlike Millennials, grew up entirely in an internet-connected world. As they are beginning to emerge in the rental market, Gen Z renters will expect technological integration in the rental space. This includes things like mobile apps to communicate with property managers or submit service requests, in-app or online bill paying, and self-showings when they are searching for properties.
At the same time, explosive demand for affordable housing from both Millenial and Gen Z renters is driving growth in a number of cities. While Florida’s rental market remains hot in Orlando and Tampa, new growth in Texas and North Carolina is attracting investors to the areas, which is why there’s an influx in demand for property management in Raleigh, NC or Austin property management.
Charlotte saw the population grow by nearly 2% the preceding year, and household growth is expected to top 2.5%. Growth in Houston remains strong, with forecasts placing the Houston area population at 7.1 million in 2020 and up to 8.7 million by 2028. Alongside Houston, the Dallas-Fort Worth-Arlington area was the top metropolitan area for job growth in 2019, and home values experienced growth of 8.1% during the past year with projected growth expected to top 4.5%.
A smaller inventory of lower-priced starter homes may lead to increased pressure on rental properties in metropolitan areas like Houston and Dallas-Fort Worth-Arlington. Though home inventory has actually been rising in these areas as new buildings have expanded, availability of starter homes at lower prices may delay the entrance of younger professionals into homeownership.
As property managers and real estate investors adapt to a changing rental landscape characterized by younger, busier, and more tech-savvy individuals, the rise of powerful tools to increase responsiveness, collapse boundaries between tenant and property manager, and offer convenience throughout the rental lifecycle will only continue to grow in today’s market. Renters are increasingly expecting tools that give them flexible payment options, the ability to submit and track repair requests, and the ability to access customer service when it’s convenient for them.
The amenities a property offers is increasingly becoming a deciding factor in where individuals choose to rent. Property managers are also responding to demand services that facilitate the lifestyle of younger renters. These include the adoption of smart locker services to accept the increasingly large number of packages stemming from the growth of online retail shopping. As online grocery delivery and the shipment of perishable goods grows, expect to see property managers incorporate refrigerated smart lockers.
Lastly, the renter market itself will continue to experience shifts that will require property management to adapt. Foremost among these changes will be the entrance of the Gen Z renter, who will be younger and more technologically integrated than any previous generation.
Keeping up with these property management trends effectively will require having the right tools in your property management toolbox. At Great Jones, we understand what modern renters are looking for, and have created the tools, expertise, and processes that promote more consistent cash flow for real estate investors. Get in touch with a Portfolio Advisor to learn more about property management in Jacksonville, FL, to Austin, TX, and everything in between.