New Year’s Resolutions For Property Managers
As the curtains draw on yet another eventful year in the rental industry, our eyes turn towards 2017 with excitement and optimism. 2016 has seen the industry go through many milestones, with the latest and one of the most critical ones being the hotly contested U.S. presidential election- which going by previous predictions, would have seen a slump in the rental and overall real estate appreciation rates. Fortunately, despite a tight, uncertain race, the industry has remained stable, and tenants continue taking up properties even in some of the previously dormant market areas.
With that out of the way, 2017 is expected to be very stable, with almost no risk of a crash downturn. Rental markets in areas like New York, Miami, Denver, Seattle, San Francisco Bay Area, San Diego, Los Angeles and Dallas, are expected to be particularly strong, aided by:
- Donald Trump’s proposed approach to “draining the swamp”
- Overall outlook of the US economy. It’s predicted to enjoy a mild cyclical rebound in 2017
- Cost of production pushed up by labor shortages
- Government deregulation trends
- The rise of millennials as prime renters
- Gradually rising mortgage rates
Evidently, the market is yours for the taking. However, to fully benefit from the recent uptake in rental units, you need to start the New Year with a solid strategy seeking to fuel persistent growth through the next 12 months. And that should form the bulk of your New Year’s resolutions.
To help you track and implement them adequately, we’ve kept them brief and actionable, focusing only the most critical elements, that are guaranteed to improve overall efficacy in your property management firm:
Take The Integrated Software Plunge
When was the last time you paid a bill via check or cash? Or rather, do you remember the last time you actually wrote a tenant a letter or memo on paper? According to World Payments Report 2016, the total electronic payments in volume currently stands at more than $426 billion, with the US marking a 4.4% growth over the last 12 months. Indicatively, people are gradually shifting to electronic payment systems, with the bulk of renters now preferring electronic over cash or check.
The trend is not limited to cash alone. Communication, as a matter of fact, is going more electronic than cash. The number of emails sent and received per day is predicted to hit 246 billion by the end of 2019. And we’ve not even factored in texts yet. So yes, property managers and renters alike are also going electronic, but they are currently leveraging separate systems to facilitate their operations.
Now, imagine having all these functionalities on a single, integrated software. Your firm should kick start the New Year with property management software that combines payment processing, tenant screening, document management, and communication on one platform. This will streamline all your operations, providing a single, multilayered pipeline for tracking and coordinating all property management operations.
Commit To A Learning Program
Although some elements remain constant, the bulk of the real estate industry keeps changing, as both firms and tenants continue adapting to developing trends. In the last couple of years, for instance, we’ve seen a paradigm shift among tenants, as millennials continue replacing the older generation as the primary group of renters across all cities in the U.S. While a third of them may own a home, the rest are not interested in settling down any time soon. They prefer living in rented units, as they focus on their jobs. Investors have consequently capitalized in properties strategically targeting them, and property managers have started adopting new prospecting approaches.
This, and many others emerging trends, require persistent training on various response elements relating to property management. Regardless of how experienced you may be at managing properties, learning a thing or two about emerging markets and current trends could substantially boost your overall strategy.
The learning process could be as simple as keeping up with fresh property management blogs and podcasts, or investing in a regular training program spreading across your entire firm. As a matter of fact, a report published by the Association of Talent and Development suggests that an investment of $680 per employee on training, translates to, on average, a 6% growth in returns.
Conduct Competitive Analysis
While focusing on your own firm is a critical element of success, it’s also advisable to step away for a moment and start analyzing your competition. There are more than 231, 457 property management firms registered in the US, with varying portfolio scales and business strategies. Knowing exactly who they are and what they do requires a comprehensive and strategic competitive analysis.
This is basically a process of comprehending your firm’s standing and position in the marketplace in relation to your competition. It’s a system of gathering intelligence by thoroughly analyzing other property management firms, and subsequently using your findings to improve your overall position.
To execute this effectively, you need careful planning, research and honest introspection. Approach it on a step by step basis, keenly evaluating both direct and indirect competitors. Seek information on how they handle their properties and tenants, their operating capitals, plus strategies they employ to minimize property turnaround rates. While some things apply across the board- like the fact that the most successful firms heavily rely on property management software- you may discover a couple of surprising strategies that could help you turn your business around.
In addition to these, you should consider evaluating your firm further to establish other important New Year’s resolutions, in line with your business objectives. For optimal results, develop an implementation framework that outlines how you plan to incorporate these resolutions over the next couple of months. And remember, keep them simple, actionable, and achievable.