In the previous year, waves of transformation swept across the real estate sector, apparently coming from all directions. Business owners and property managers have been challenged to absorb the impact of material and labor shortages, industry consolidation, increasing regulations, and the housing affordability crisis. They have faced increased expectations and demands from the residents and clients. But the best part is, property managers have confronted them well by providing exceptional solutions and customer services that have brought them success. Most of them adopted the best real time ERP software to manage everything with fewer resources.
Property Managers had to use separate property management systems for each property location; therefore, monitoring, interaction, and management with the business center became cumbersome. Apart from this, this type of property management where we have to look after different management setups for different properties poses multiple other challenges such as an increase in expense, complexity in handling, and difficulty in making effective business decisions
Some Interesting Stats of Future Real Estate Market
Being the major component of the world’s economy, the real estate market has a global value of over $7.196 billion. If we mainly discuss the housing market, there was an upward trend in November 2021, with existing house sales increasing by 1.9% month over month. According to the current trends, the existing home sales are expected to rise in 2022; as a result, there will be low mortgage rates, a solid labor market, and moderated house price growth. Typical US home was worth $316,368 in the previous year, which is 19.3% up to last year. The global construction output is anticipated to be two times from US$8.7 trillion in 2012 to US$15 trillion by 2025. By 2050, it is expected that 200 million people will migrate worldwide, and the majority of them are potential real estate buyers.
The changing real estate landscape will substantially affect the real estate investment community. Experts believe that the global investable real estate market will expand considerably, leading to a huge expansion in opportunity, especially in emerging economies. Therefore, we need to think beyond and find out how we can benefit from the upcoming opportunities in the real estate market. Incorporating the latest technology and PropTech trends is the only way to leverage the benefits.
In this blog, we will discuss different trends in practice for a long time and how they will continue to influence the business even today. Also, you will learn how to set your strategy for the year ahead.
Increasing Popularity of Single-Family Rentals
The popularity of single-family rentals has skyrocketed because they offer more living space to the renters at more affordable prices. Most people are still on the hunt for rentals that can accommodate their evolving needs, and they may dominate the rental market for longer than previous generations. This is affecting the marketing in two different ways:
More Pandemic-Driven Interest In Spacious & Affordable Rentals
Apart from single-family properties, Property managers are fielding greater interest from the renters in indoor and outdoor space at more affordable rates. Single-family and suburban neighborhoods are preferred by those who work remotely and wish to move farther away from city centers. On the other hand, millennials working remotely with their partners, kids, relatives, and pets, require more space, and as Baby Boomers look for rentals where they can happily age in place without the stress of Home Township.
Increased Interest in Single-Family Rentals from Large Firms: As the interest in single-family rentals grows exponentially, property managers are experiencing the impacts of an influx of institutional developers, investors, and property management firms within their local markets. Built-to-rent communities are being constructed in markets, competing with single-family properties and serving as the primary driver of the asset.
Consolidation in the Property Management Sector
Property managers could notice the industry consolidating, with investment dollars pouring into the single-family rental sector. Rush in the market motivates small-portfolio investors and property owners to sell off their properties. This gives property managers an excellent opportunity to develop their own portfolios through acquiring small companies and investment portfolios.
- Increased Investors In Property Managers’ Client Base: The share of property managers’ client base has increased from 67% to 71% as many property owners have chosen to sell their rental properties. Investors acquiring these properties are impacting the rental market of consolidation in property ownership. But still, small-portfolio investors continue to own the vast majority of small rental properties in the US.
- More Opportunities To Grow Through Acquisitions: Some property managers and investors are selling off their portfolios rather than adapting to the fast pace changes in the current market. This creates opportunities for others to expand through acquisitions of other companies’ or investors’ portfolios over the next few years.
Increased Regulation on Rental Properties
Property managers and their services have gained the spotlight in the pandemic, especially amidst rapidly shifting local market conditions and rental regulations. The majority of property managers believe that their clients see more value in their services. They are experiencing an increase in demand for their professional expertise, above and beyond their traditionally fulfilled duties.
- More Regulatory Anxiety Means More Dependence On Property Managers: Rental owners avoid self-managing their properties, especially after increased regulation and resident-related issues. As a result, there is a rise in the number of rental owners who want Property Managers to take responsibility for their property. The majority of the rental owners work with property managers to ensure that their properties are being run in compliance with current regulations.
- More Investor Clients Means More Interest In Expertise-Based Services: Investors trust property managers as advisors of local market conditions and effective rental property operations. This has resulted in increased demand for expertise-based services of property managers as the rental owners seek services like investment, financial and legal advice.
- More Resident-Related Issues Means More Work For Property Managers: Property Managers can attract and retain residents, which has made them valuable in the eyes of rental owners. 52% of rental owners hire a property manager primarily because they need help managing their residents. Property Managers perform tenant screening to verify tenants so that renters have a stable source of income. They also craft watertight leases to protect the interest of rental owners when evictions are restricted.
REDA – ERP for Property Managers
REDA is the #1 CRM recommended by Software Advice. It is built on a highly innovative, accessible, and scalable Salesforce Platform. REDA forms a holistic & collaborative knowledge ecosystem around different processes, such as construction, leasing, sale, property acquisition, field operations, and enterprise accounting. Our Salesforce Property Management software allows property managers to provide high-level customer service to their customers and develop long-term business relationships for their property owners.
From owner portfolio management to risk forecasting & mitigation, revenue optimization to documents & agreements, and much more, REDA can help property managers manage everything well and increase their trust in rental owners. For more information on our product, feel free to call us!
