- June 29, 2020
- Posted by: admin
- Category: Real Estate
Back in March of this year, property managers across the country quickly pivoted strategies to address Covid-19 head-on. They implemented new policies, revised safety procedures for residents and staff, shifted a bulk of associates to remote working models and dealt with managing resident queries and concerns over monthly rent payments. It was a month unlike any other.
Fast forward to today when the whole world continues to deal with the impact of the pandemic, and property managers must continually adjust to best address some of the new realities.
However, according to our recent data (an AppFolio survey of 1,000 property management professionals), 66% of respondents have a positive outlook on the future.
It is important to be optimistic about business, especially as we start to settle into a post-pandemic future. In recent weeks, we have started to see states reduce Covid-19 restrictions. While we’re nowhere near back to “normal” and may not be for the foreseeable future, there is enough of a semblance of it that some property management businesses (residential and some commercial — likely not retail, which may struggle for a while) can begin operating routine activities again, albeit with several critical adjustments.
Resident Retention and Occupancy
The top business outcomes property management professionals are focused on right now naturally revolve around ways to maintain revenue. Twenty-seven percent of our respondents were focused on increasing or stabilizing occupancy, while 21% cited collecting rent, and 16% cited leasing vacant units.
Interestingly, Coldwell Banker Richard Ellis (CBRE) group found that the turnover rate in the apartment segment has declined in 2020. In 2019, 47.5% of total rented units were not renewed, and that dropped to 42.1% in April 2020. However, CBRE notes that turnover decrease is the likely result of lockdown mandates and economic uncertainty. The reality is that moving will start to pick up again as the country slowly reopens, so increasing and stabilizing occupancy needs to be top of mind for property management teams looking forward.
Collecting rent may continue to be challenging in the current economic climate. Occupancy and filling units, however, is something that property management teams may have a little more control over. Resident turnover leaves vacancies, and vacancies essentially leave money on the table. For every month a unit remains vacant, it is a serious blow to property management revenue.
This reality and business need is obvious. Just like in pre-pandemic times, it’s important for property management teams to place emphasis on the resident experience, making it as seamless as possible to keep residents satisfied. That remains the biggest tool in the toolbox for avoiding unexpected turnover and getting lease renewals signed.
Property management teams must continue to put their residents first and ensure that they are providing and improving upon the resident living experience. Amenities, perks and services offered might look different in a post-Covid-19 future — maybe it’s discounted grocery delivery services or the re-evaluation of common area set-ups to make social distancing easier. Whatever it is, it could easily make the difference between residents who are satisfied versus unsatisfied.
For social distancing reasons, in-person showings have been pushed aside for virtual showings. In fact, 53% of our respondents have already increased their dependency on virtual showings, and 71% said they have increased prioritizing virtual showings in leasing activities. For example, in March, Zillow saw a 188% increase in the number of 3D home tours created from February. But even prior to the pandemic, Zillow’s 2019 consumer housing trends report found around 26% of recent homebuyers indicated they preferred 3D housing tours over in-person showings. The signs all point to consumers and leasing teams being increasingly receptive to virtual showings, with or without pandemic realities.
Technology has been an incredible asset during this time for property management companies, helping them navigate how to shift business practices and business models to adhere to social distancing guidelines. While we cannot predict the future, property management professionals are seeing certain technologies they have relied on during the pandemic, such as those that enable virtual showings, as here to stay.
Outside of leasing, other technologies that support remote environments include mobile data access and bulk email/text messaging. Regardless of the circumstance, remote setting or not, these are two technologies that streamline property management business processes, so it is not completely surprising that the value they may have for management companies now might very well continue in the post-pandemic future.
The ‘New’ Normal
As property management teams continue to press onward with their businesses, the next several months will still be challenging — no one knows what the world will look like at that point. However, because property management professionals and teams have been so adept at making shifts over the last few months, it is clear they can tackle whatever the future may bring.
Technology is certainly part of that future, but so is retraining or cross-training staff around post-pandemic initiatives, having continued and effective communication with residents, and ensuring the associates are able to do their jobs safely and effectively. There is so much that goes into making pivots within business practices, and it’s not all from one source. Property management professionals who can see the bigger picture will likely find more success in the future.
Copied from Forbes.