There’s no better time to venture into entrepreneurship than now. One of the most proven and time tested industries that seem to make more millionaires than any other industry is real estate. This is why more and more people try their luck in the hopes of expanding their financial portfolio or perhaps making it into the millionaire’s list. However, without proper planning, this task could prove to be difficult to achieve. So, if you’re thinking about venturing into property management, you should not dive in without doing due diligence. If you expect your property management business to flourish, you have to do your research and the first step is to be aware of the prevailing industry trends and predictions.
The real estate industry, specifically property management, is a booming industry. If you have a property management business, you already know that you are up against countless others who are trying to make it big in the industry as well. To be informed is to stay ahead of the game. Knowing the prevailing trends will arm you with the knowledge to make informed decisions. It will allow you to keep an eye out for opportunities and sidestep or even mitigate risks. Knowledge is the key to help you navigate the property management business with perfect ease.
Here are a few key areas in property management to watch out for:
Millennials still make up the largest percentage of the industry’s target market. With the oldest millennial being 39 years old and the youngest turning 24 years old in 2020, this demographic is sure to be the prime focus of marketing efforts when it comes to real estate. The older millennials are probably gearing up to be homeowners, while the younger ones are most definitely in the position to rent. However, property managers are expected to predict future shifts in the tenant market. With the Gen Z market expected to grow exponentially by 6% in the next decade, their generation is worth considering as an upcoming target market for property managers. In time, Gen Z will make up a huge chunk of the labor force and consequently, the tenant market. To prepare for this, property managers must work on updating their website and think about including smart building amenities and tech solutions for their Gen Z tenants who grew up using technology their entire lives.
Some examples of smart building technology are:
● Smart locks and keyless solutions
● Occupancy sensors
● HVAC smart sensors
● Remote systems control
● Smart security systems
Property managers should also look at upgrading or implementing these technologies:
● Online payment systems – this feature will make rent and dues collection and payment easier
● Wi-fi and data access – while still not a standard this feature could come as a huge draw for tenants.
● Communication and reporting systems – could come in the form of cloud sharing drives, collaboration, and instant-messaging tools.
Perhaps the biggest market trend in the property management industry is automation. Automation is the use of technology or applications to perform a procedure or process with minimal human assistance. Processes like rent collection, supplier and service payments, maintenance, insurance, and tax payments are very time consuming and automating them should be a must for property managers moving forward.
Technology will not only make it easier for property managers to do their work. It can also affect other aspects of property management. Below are some examples:
● Landlord communication – landlords will have an easier time communicating with their tenants or service providers and vice versa if tools such as instant messaging systems and incident reporting tools are available to them.
● Energy conservation – energy conservation can be done with the use of energy monitoring smart building technologies and smart HVAC technologies. Property managers can look at a reduction of 50% on their overhead and maintenance expenses with the use of smart building technology.
● Security – the same with smart building technology, smart building security systems are also helpful tools that can make a property a hot item in the market. Property managers can play up the fact that their buildings are safe and fitted with the newest security systems.
● Social communities – community-building leads to healthier and happier tenants and safer neighborhoods. If tenants are more invested in the property and are friends with their neighbors, property managers have an easier time keeping them. It is easier to keep existing tenants as opposed to looking for new ones.
New marketing techniques are popping up here and there. It is important for property managers to keep a pulse on these new trends and experiment on them from time to time to see what works for your particular niche. While other types of media are still around, there is a huge focus on digital marketing. A lot of marketing programs are now directed towards digital marketing and internet users which could have the potential to reach a wider audience. Most property managers look into creating social media accounts, websites, blogs, or just showing up at online forums to offer their expertise to later on direct their readers to a website that can provide more in-depth answers.
New Player and Game Changers
Being a rental property owner is a business. If you act as a landlord/property manager, you are essentially the boss of your own business. Operating the business by yourself can be a lot of work and most beginners get overwhelmed. Eventually, new rental property owners learn the ropes, get good at it, and maybe branch out to expand and grow their own property portfolio. While most rental property owners are keen to learn and absorb new information, they must also keep an eye out for new players bringing in new methods, but most especially keep an eye out for old and established property management companies that constantly update their capabilities.
The projected increase in apartment demand this year is 11%, with an even higher demand projected for next year. This isn’t surprising as over 80% of renters still believe that renting is a more affordable option than owning a home. So property managers would do well to keep in mind that apartment rental demand is and will remain high. Some of the highest demands can be observed in large cities like Dallas/Fort Worth, Houston, Chicago, Washington, D.C, and New York City.
These are the five trends to watch out for in 2020. Stay invested in your career and keep reading this blog to learn how you can succeed in the property management industry.
Davis Property Management
At Davis Property Management, we provide fast, friendly, and professional service tailored to your individual property management needs.