CEO of Buildium, a platform to help property managers streamline their business and build relationships with owners, vendors and residents.
Virtual apartment showings. Online rental applications. E-payments instead of rent checks. Like so many industries, property management has found a way to adapt and push forward during the pandemic. It certainly hasn’t always been easy. Property managers and renters are on the front lines of the crisis, in more ways than one. Health and safety issues are an everyday concern; meanwhile, economic fallout has made it harder to both pay and collect rent. As questions around eviction moratoriums persist, the months ahead will bring continued uncertainty and challenges.
All of which makes it easy to overlook something critical: key ways that the crisis has accelerated the future of property management and transformed the rental experience for the better. Many of these shifts were already in progress, but what we’ve seen in both our own survey data and interactions with front line managers is an acceleration of timeline and urgency. This is born partly out of necessity, but the impact will extend for years and decades to come.
Here are four critical property management trends that have accelerated during the crisis.
Let’s Get Digital
The digital transformation of the property management industry was happening before the pandemic. At the beginning of 2020 (which feels like a lifetime ago, I know), 80% of property managers we surveyed reported reliance on electronic payments and digital communication. But tools that streamline logistics and communication — and minimize needless face-to-face interaction — are more urgently needed than ever.
So it’s no surprise that, as the world went into lockdown, there was a huge uptick in demand for “zero-touch” digital services, like online payments as well as virtual screenings and showings, from residents and owners alike. Not only are these tools important for social distancing, they also help property managers gain efficiency at a time when new responsibilities and challenges are emerging.
Yet, today’s digital tools are just beginning to scratch the surface of what’s possible. The months and years ahead promise a wave of powerful integrations when it comes to property management technology, as the sector continues to mature. Imagine best-of-breed virtual-showing apps, for example, working seamlessly with credit check and payment tools. Property management platforms with open APIs will serve as the heart of entire app ecosystems, allowing plug-and-play integration with a cross-section of leading tools.
To The ‘Burbs (And Back)
A few months into working from home, it was clear to my co-worker Ben — an avowed urbanite — that his cozy condo in Beacon Hill just wasn’t big enough to be an office, a school and a home for his whole family. So they packed up and headed for Boston’s suburbs, where green space and some breathing room awaited.
He’s not the only one who’s leaving the city for greener pastures these days. Even before lockdown, housing prices and job opportunities were driving people out of the major cities to the suburbs or smaller urban hubs. Covid has just put the option to get out of town into stark relief. Now that we’re officially in the work-from-anywhere era, with employees no longer tethered to housing in cities, is that pricey downtown apartment really necessary anymore?
One important caveat here: Not all renters have the luxury or resources to move. But those who do are creating an opportunity for property managers, with increased demand in satellite and secondary cities and towns. Likewise, the vacancies left behind in cities will need to be filled. As Gen Xers age and become empty-nesters, we may well see reverse migration into cities, where more availability and lower rents make renting attractive again.
Development Marches On
I’ve been noting for years a shift from “accidental landlords” to institutional investors: fewer mom-and-pop-run buildings, more companies like Invitation Homes or American Homes 4 Rent, which own and operate tens of thousands of rental properties on a massive scale.
Last year, institutional investors like these owned 55% of the multifamily rental market. The pandemic has added fuel to this fire and led to increased interest in rental development overall. Indeed, well-capitalized investors are swooping in during a moment when home sales have remained unexpectedly brisk to buy and build new rental stock.
The bright side of this is that this new investment can increase rental stock in chronically underserved areas, while also spurring an up-leveling of property management and resident expectations. Interestingly, this is ramping up another already-hot trend: increased demand for property management roles. The need for property managers was already expected to increase; the pandemic has only accelerated demand from owners looking for the exact offerings property managers provide, from rent collection to tenant screening, as well as more expertise-based services.
Residents Demand A Human Touch
We’re living in a time where many renters now have the freedom to work, and live — anywhere — and some degree of flexibility is likely to stay — even post-pandemic. At the same time, more residents are seeking out rental units where trust, communication and transparency are prioritized.
All of this points to the strengthening of a critical trend in property management: the prioritizing of relationships between property managers and residents. At its heart, this is about emphasizing long-term relationships with residents based on trust and mutual respect.
During the crisis, those kinds of relationships have grown more important than ever. Property managers are working with residents to create flexible payment plans, facilitate lease renewals and help connect residents with outside resources. This may not have been a top priority for managers before, but this adaptable, human touch has been indispensable in navigating a changing rental landscape.
The crisis has tested the property management industry, as it has so many sectors, like never before. While there are real challenges ahead, there is also reason for genuine optimism. Property managers have a clear sight toward growth in the next two years. Just as important, critical shifts — better technology, more choices, more engaged property management — have been accelerated.