Senior Vice President, Investment Management at AppFolio, which provides cloud-based property management software solutions.
Given the unknowns about the pandemic and vaccine distribution timelines, it is quite difficult to provide predictions in terms of what 2021 what will look like in the world of property management. However, there are some key trends surfacing in the industry that will have a significant impact on it and will shape it for years to come.
The most clear-cut key trends developing in the residential property management industry fall under two different categories: technology and the renter experience.
Both trends will have a lasting impact on how the property management industry operates during the pandemic and beyond. However, trends do not happen overnight — they take time and continually evolve.
Property management teams who consider these trends and make a dedicated effort to adjust current processes or practices to align with the direction in which the industry is heading will be best positioned as we embark on the year 2021.
Digital Transformation Acceleration
When any major disruption occurs, like a pandemic, old processes die out fast and new processes replace them to accommodate new circumstances. That is the definition of what happened in the property management sector this year. Like many industries, property management was, prior to the pandemic, already moving in the direction of increased digital transformation. But the shift to remote work and social distancing measures accelerated it rapidly.
Suddenly, many property managers were no longer working out of their offices — but they still had to manage entire property portfolios and sometimes thousands of residents. The rapid adoption of technologies that enabled property managers to have more visibility into their businesses — like property performance data analytics, real-time insight into in-progress workflows or maintenance requests — helped them match or come close to their productivity in-office. Adding new technology tools also arguably gave them more insight into operations than they may have had previously. The adoption of these new tools signals a shift in the industry that sets up teams for more flexibility and agility. It will likely increase expectations for easy access to key business insights and information, on-the-go, anywhere and anytime.
Advanced technologies also enable contactless everything for the property management industry and renters alike. Amid a pandemic, a contactless environment helps support safety measures. After the pandemic, it will support increased convenience. For example, online rent collections are increasingly gaining traction as a more safe and convenient way for renters to submit payments. The same is true for reviewing and signing digital leases instead of signing paper leases in a leasing office. Safety and convenience are coming together.
Taking the apartment hunt virtual has also been a significant change in the leasing process — and one that will continue to be relevant in the future. In fact, a recent survey we did of 1,000 renters found that 40% of renters said they wanted to have the option to view units virtually and in-person post-pandemic, and 13% said they prefer to view units only virtually post-pandemic. Renters clearly see the value — beyond the safety — of virtual options in the apartment hunt. In a separate survey conducted by a large scale rental platform published in May 2020, 34% of the more than 500 respondents said they looked more for virtual tours as part of their search criteria due to Covid-19.
Elevating The Renter Experience
One key piece of learning that has come to light for property management teams in 2020 is the value of providing an excellent renter experience. That does not just mean providing good service to renters.
While it has been a challenging year for everyone, every situation is different. Maintaining a spirit of good relations with residents is so important this year, and proactively reaching out to residents to understand their situations can be helpful in providing a better experience for them.
There is a great opportunity for property management teams to also spark more resident engagement — to help people feel more connected to their communities. There are a number of ways in which to drive more engagement, and property management teams can really get creative in terms of how they approach this. For example, during the holidays, setting up a building-wide or community-wide coat drive can lead to more engagement within residential communities, and it supports greater social good efforts.
But apart from elevating the renter experience, property management teams must also account for new shifts in renter preferences. Our renter survey that I’d referenced earlier found that 60% of renters agreed that the pandemic has impacted their preference on where to live. Forty-four percent of those renters indicated a desire to live in a less populated location as one of their top reasons for moving or wanting to move. This is in keeping with the increased flexibility many renters may have with working from home and the preferences of those workers to continue working from home even after the pandemic. A Gallup survey from October 2020 recorded that 35% of respondents who worked from home would like to continue to do so. The flexibility in work location also allows more choices in terms of where workers live.
But how can teams best respond to this? They should take the opportunity, especially in large cities where rents have understandably dropped and retaining renters is currently more challenging, to find new ways to attract and keep renters. One way is with personalized concessions or perks. For example, some high-end buildings have even been known to install home-workout equipment in-unit as a perk, given the increasing appeal of home workouts amid social distancing realities and as Covid-19 cases continue. But perks absolutely do not have to be a costly expense — it is the thought and consideration that counts. Like with resident engagement, it is important for property management teams to get creative here. It is a new ballgame.
Property management teams now have a new reality to work with. Those that make adjustments to accommodate it more quickly will ultimately see the potentially greater benefits than those who do not make adjustments.