The property management industry operates in an aggressive and continuously changing environment. For property management businesses to thrive, property managers need to stay updated with the upcoming industry trends.
As the pandemic curse follows us in 2021, property managers require a solid game plan strategy and hands-on information. Emerging property management technology trends help businesses improve their operational efficiencies and streamline processes. If you are not digital savvy in this era, you risk losing market share to your competitors.
To stay on top of things, property managers need to familiarize themselves with the latest industry information and market trends. That’s why in this article, we have summarized the ongoing trends in the property management industry so you can watch out for opportunities and mitigate risks beforehand.
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Property Management Industry Statistics:
Property Management Industry is one of the fastest growing industries in the US, with an annual growth rate of 2.5% for the past 5 years. In 2021, the property management industry generated a revenue of $88 billion in total, contributed by more than 280K property management companies all across the US. The global property management industry is valued around $13.88 billion of which North American market grabs the major chunk of around $5 billion. In 2020, North American property management industry grew by a whopping 7.8% from 2019 which means now is the best time to start your property management company.
With major advancements, the property management industry has refocused on “service-oriented & tech-enabled” property management. However, following are the macro trends that are changing the entire industry’s landscape:
- Continuous changes in regulations impact the lead-to-lease cycle
- Transition towards a tech-driven future
- More owners are selling v/s renting
- Changing tenant demographics
- Rising costs of managing properties
Property Management Industry Trend #1: Rise of 'PropTech'
As we proceed to 2021, aligning businesses with modern technology has become necessary, and even property managers can’t deny that. Property managers require intelligent and smart automation tools to connect with clients, residents, and staff when they can’t be present in the same room.
Most property management companies were already using applications for rent collection, maintenance requests, or accounting. But COVID further accelerated property managers to automate other aspects of their business as well.
Property management technology allows property managers to grow their portfolio and lets technology take care of mundane tasks.
1. Artificial Intelligence
The insurgence of AI (Artificial Intelligence) has opened up many avenues for the property management industry. Smart property management companies are implementing AI-powered tools to gain a competitive edge.
AI-powered chatbots can automatically respond to tenant inquiries from 3rd party listing websites and pre-screen prospects before automatically booking tours. These intelligent chatbots can automatically answer renter emails, increasing your team's operational efficiency by saving 75% of your leasing team’s time.
Property managers can enhance the website experience for incoming renter leads by integrating these chatbots on their site, resulting into higher lead-to-lease conversions.
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2. Virtual Tours
The augmented & virtual reality market in the US reached 19 Billion US dollars in 2020, encouraging property managers to adopt it for their businesses.
Property management industry heavily relies on direct communication for day-to-day operations. COVID-19 not only changed the way people communicated but revolutionized the entire process of in-person property showings.
Most property managers switched to virtual or live showings during the pandemic. However, 41% of Millennials prefer 3D tours of the property for a high-quality immersive experience. You can create one with the Zillow 3D Home app, which is entirely free of cost.
3. Cloud Computing
The influx of cloud computing is another crucial development in property management technology trends. Where conventional server-based programs have become completely obsolete in 2021, cloud-computing is progressing rapidly in the real estate industry.
Cloud-based property management software has made property managers’ lives easier by increasing mobility. They streamline work activities and keep all stakeholders of the property management business updated.
These software eliminate the need for property managers to collect information physically while reducing communication costs with improved efficiency. The owners and tenants can log in with their credentials and access financial and property information on the go. They also get regular updates about contact information, rent payments, online lease, and lead reports.
4. Intelligent Homes
The only way to attract and retain Gen Z tenants is the presence of smart home technologies in your rental property. While smart homes allow property managers to raise rent prices, it also reduces maintenance costs.
Artificially intelligent thermostats, HVAC, or security tools help conserve energy and predict utility bills based on usage. Programmed sensors, smart thermostats, and lighting controls save energy and consumer’s money. The new integrated ecosystems provide an excellent experience to its residents.
Property Management Industry Trend #2: Ongoing Government Restrictions
COVID-19 led to the government taking some drastic precautionary measures to protect tenants’ health and support them during rough unemployment phases. As the eviction moratoriums and restrictions on rent payments continue in 2021, property managers find it hard to manage portfolio growth and profitability.
In the US, almost 34 out of 50 states prohibited evictions, affecting the entire property management industry negatively. Continuous changes in building codes and regulations halted ongoing renovations and constructions throughout the country. The local laws enforced self-showings, further raising the costs of cleaning and overall maintenance during the pandemic.
As the market recovers in 2021, the demand for apartment rentals will most probably increase. However, the increasing market regulations will lead to an inevitable rise in rental prices in urban areas.
Bans on single-family zoning & the rise of Upzoning
Early on in 2020, The City of Minneapolis and the State of Oregon passed laws to ban single-family zoning, reshaping the entire housing industry game. California, Maryland, and Virginia also plan to pass similar bills shortly.
Single-family zoning means restricting land for single-family home development, preventing developers from building any other housing type such as duplexes, triplexes, fourplexes, etc.
The bills do not prevent the development of single-family houses but give builders an additional choice of other housing.
With the rise in bans comes an upsurge demand for upzoning in the hopes of denser, greener, and more affordable housing. For property managers, an increase in housing density means better opportunities.
Since the concept is relatively new, property managers should be vigilant of their areas’ housing to measure the impact of subsequent changes on their portfolios.
Although changes in regulations impact lead-to-lease cycles, staying responsive will help property managers grow and transform with the societal changes hand in hand.
Property Management Industry Trend #3: Gen Z Enters the Housing Market
A significant challenge the property management industry will face in 2021 is adapting to the generational shift and the diverse housing demands of each generation.
For the last ten years, property management marketing has been focused mostly on Millennials. The oldest Millennials (39 years old) are planning to own houses in this decade, the youngest Millennials (24 years old) are looking forward to renting.
But the coming decade expects exponential growth in the Gen Z population by 6% (from 8 million to 55 million). With Gen Z comprising one-third of the workforce and renter population, property managers need to be ready for this transformation in the years to come.
Gen Z, also known as true digital natives, relies heavily on social media for making their purchasing and lifestyle decisions. As a property manager, you need to make sure your website is optimized for cellphones and provides a smooth digital experience. These individuals appreciate unique and digital-savvy marketing strategies.
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Smart Home Amenities
The primary difference between Millennials and Gen Z is the latter’s inclination towards technology. Gen Z grew up using technology and expects advanced property management systems as well. The new generation of renters has become increasingly frugal and environmentally conscious. They are willing to spend more on smart homes for long-term savings in the future.
Property managers should consider including smart home technologies and amenities that appeal to this generation in rental advertisements. Here are the most desired amenities for smart homes:
- Smart locks and keyless door entry
- HVAC smart sensors
- Remote systems control
- Smart security systems
- Online payment systems
- Wi-fi and data access
- Charging and docking stations
- High tech fitness centers
- Outdoor heaters and fireplaces
- Cloud sharing communication and reporting systems
- Instant messaging tools
- Voice Control & Home entertainment solutions
Increased use of technology is impacting the property management industry as a whole. Investors, landlords, agents, and property managers should capitalize on the opportunities resulting from new technology entering the market.
Property Managers are Expanding
A massive shift in the rental market awaits in 2021, as property managers move away from oversaturated urban markets to smaller towns and suburbs. A primary reason to cause this is Gen X moving away from metro cities to suburbs for more room and office space.
The work-from-home era has proved to be an enabler in this migration. Even before lockdown, the housing prices and job opportunities drove people out of the major cities to the suburbs or smaller urban hubs. The growing demand for single-family houses in the past few years and increasing rent further encouraged property managers to look into other market segments.
On the contrary, Gen Z is moving out on their own and are looking for cheaper rent and better facilities to begin their grad or post-grad lives in bigger cities.
Property Management Industry Trend #4: Better Marketing Strategies
Property managers must focus on new marketing trends surfacing in the property management industry. In the era of digitization, implementing digital marketing techniques helps property managers humanize their brand and create long-lasting relationships.
When it comes to property management marketing trends, most property managers resort to website development or outdated SEO techniques. The new decade calls for building emotional connections with owners, residents, and staff members.
1. Content Marketing
The latest trend in property management marketing is producing the best answers to your consumer’s search queries. Property managers can create informative and evergreen content to help their company name stay on top of the Google results.
A good property management site offers the best value to its readers and keeps readers engaged with different forms of content such as case studies, white paper, e-books, blogs, or infographics. A recommended length for your homepage content is approximately 700-1500 words.
Thorough keyword research beforehand will help you in showing up for SERPs as well. Avoid keyword stuffing and optimize your content for SEO to achieve excellent results. Driving organic traffic to your website can be challenging, but you can attract more owner leads with proper on-site SEO techniques.
2. Mobile-friendly Websites
Almost 80% of owners and renters use cellphones for their web searches. Your property management site needs to be user friendly and responsive for incoming leads to spend more time on it without interruption.
A mobile-optimized property management site is different from a mobile version of your site. Mobile versions of the site will add an (m.yourwebsite.com) in your domain. In contrast, responsive sites adjust to changes in screen orientation and size without changing your domain name.
To drive better and qualified owner leads through your website, property managers need to redesign their websites to enhance the navigation experience. You can also integrate a property management chatbot that actively answers incoming renter leads' inquiries and interacts with them 24/7. If the inbound traffic spends more time, Google ultimately assigns higher domain authority to your website.
3. Social Media
With everyone stuck at home, social media consumption has increased significantly among all generations. It has become the center of attraction for all marketing related activities. Property managers can leverage this marketing trend for attracting high-quality tenants and developing stronger relations with other owners.
Property managers can increase their brand authority by sharing authentic reviews on social media. They can also create a shared Facebook group for owners and existing tenants to build an online community. A virtual community helps everyone stay in touch and keeps everyone updated on new policies as well.
The more engaging content on social media, the better brand recall you will receive. It is also important to note that social media presence boosts your SEO and increases your content' shareability.
Property Management Industry Trend #5: High Demand for Rentals
The demand for rentals is an essential factor for property managers, which helps them plan strategically and grow their portfolios. Despite a 3% increase in rent nationally, more than 80% of renters plan to rent rather than own a house in 2021.
Although Millennials are expected to enter the homebuyer category in 2021, COVID-19 has worsened their situation. The majority is planning to renew their leases and continue renting in 2021. Moreover, Gen Z renters which includes entry-level workers, recent grads, or students, are looking for affordable rentals.
Here are the results of Buildium’s property management industry report 2021:
24% of Gen Z renters plan on renewing their current lease, whereas the remaining 19% are worried due to financial insecurity and economic instability. Moreover, 23% of Millennial renters plan to renew their lease, and only 17% are planning on buying a home in 2021.
Implications for Property Managers
The pandemic has improved the relationship between property managers and owners. Clients found property management services more valuable as property managers devised rent collection strategies while prioritizing both the residents and rental owners’ financial needs.
Increasing regulations and policies have made handling properties further complex for all. Property managers' legal knowledge assists owners in navigating the post-pandemic litigation scenario.
Moreover, with compressing cap rates, property managers have a high chance of leveraging their expertise in profit maximization for the owners. COVID-19 has made owners realize the importance of property managers and their services.
In today’s fast-moving world, property managers should be ready to adapt to the latest trends in the property management industry to keep up with the ever-changing consumer demands. The future will crown only those companies who embrace advanced property management technologies for a competitive edge.
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