Adaptability is at the heart of what it means to be a property manager—and this year, in the face of a pandemic and recession, property managers have rapidly shifted gears to solve problems they’ve never faced before. Many have sacrificed their profitability to make sure their residents’ and clients’ needs were met before their own. They’ve adapted to regulatory changes like eviction moratoria, implemented new safety protocols in their properties, and started operating their businesses remotely—all in response to conditions that changed overnight.
In this unexpected environment, property managers have become more visible and valuable than ever within the rental ecosystem. Our 2021 Industry Report found that it’s this adaptability that forms the foundation of their potential for expansion, with more than three-quarters of property managers projecting revenue and portfolio growth in 2021 and 2022. Let’s look at the factors that have them poised for success:
1. Demand for professional management
As running a rental property becomes more complex than ever, the value of property managers’ expertise in property operations, local market conditions, and regulatory changes has increased exponentially. We saw double-digit growth in the number of rental owners who want a property manager’s help with rent collection, maintenance, evictions, leasing, inspections, and other processes that have become more cumbersome during COVID-19—all of which must now be accomplished in a ‘zero-touch’ context.
2. Shifting priorities
Prior to 2020, property managers’ priorities were incredibly consistent: growth, efficiency, and profitability. This year, however, ‘residents’ accelerated to their second most important priority—a 29-point leap in just one year.
What this change reflects is a shift in energy: Property managers have spent the year working closely with residents to modify lease agreements and create payment plans. Property managers hope that their hard work to keep residents in their homes—as they simultaneously work to protect their clients’ investments—will ultimately strengthen the trust and loyalty that customers feel toward their property manager.
3. Creative Growth Strategies
As rent growth has slowed and rent payments’ reliability has faltered during COVID-19, property managers have found new ways to diversify their revenue and achieve portfolio growth. For example:
- Instead of raising rents on their current properties, some property managers are taking on more lucrative property types.
- Rather than charging additional fees, property managers are offering new services to residents based on convenience and value.
- Instead of relying entirely on cultivating new client leads, property managers are seeking out other property managers approaching retirement, with an offer to buy their portfolios outright.
By adapting their growth strategies to meet the moment, property managers are uncovering new opportunities amidst familiar challenges in 2020.
4. Embracing digital services
Technology is often equated with increased efficiency—and while this is true, technology can also provide new revenue opportunity. Think: digital services.
Both property owners and residents ranked digitally-based services as priorities in our survey, illustrating an opportunity for property managers to meet demand and stand apart from the competition, particularly in a time where zero-touch interactions are a preference, if not a necessity. By offering a digital lead-to-lease lifecycle, as well as app- or portal-based rent collections and communications, property managers open up new opportunities to offer—and monetize—more services.
The road ahead
COVID-19 has made property managers’ value more evident and in-demand than ever. The crisis management that has long been a primary aspect of property managers’ work has prepared them to adapt, shift, and innovate in the face of the novel challenges that have emerged in 2020; and that has made them feel confident in the future growth of their businesses.
NOTE: All data is from Buildium’s 2021 State of the Property Management Industry Report, based on input from over 5000 property managers, property owners, and residents.
Headquartered in Boston, MA, Buildium provides an industry-leading, cloud-based property management platform that enables rental residential and association property managers to take control of every aspect of their business, whether in the office or fully remote. Each year, Buildium publishes The State of the Property Management Industry Report, based on thousands of survey responses from property managers, property owners, and residents. This year’s report was published on October 20, 2020 and is available here.