It's hard to believe we are already more than ½ way through 2023. As always, there is no crystal ball, and predicting the specific developments in residential property management beyond that point is challenging. However, as I've been saying all this year, and predict that in 2024, we will see some very good times in our property management industry.
Let's consider this to be Bob's best shot at crystal ball predictions! Here are some current and coming trends that make it even more important for property owners to engage a property management company.
Landlords Galore: Individual investors have been entering the rental home market by the scores since the pandemic. Rapid appreciation of real estate and low interest rates brought many do it yourself landlords into our space as small-time competitors. Now, with interest rates still on the rise, real estate sales slowing, many property owners are not in a position to sell their home and also become what we affectionately call "accidental landlords". These factors create the perfect confluence of forces driving the property management industry in 2023 and beyond as many of these DIY landlords realize how challenging managing properties can be. Better off leaving it to the pros like us!
Smart Home Integration: Smart home technology will likely heavily influence the future of residential property management. Property managers will need to adopt smart devices and IoT (Internet of Things) solutions to enhance security, energy efficiency, and overall tenant experience. This will be especially true as new homes enter the rental market and the cost for such built-in devices decreases. These smart technologies can enable remote property monitoring, automated maintenance requests, and energy management systems, improving cost-effectiveness and efficiencies for property owners and tenants.
Data-Driven Decision Making: Property management companies will increasingly rely on data analytics to optimize property operations. From predicting maintenance needs to understanding tenant preferences, data-driven insights can improve property management efficiency and enable more personalized services for residents. The day of AI and big data are fast approaching for our industry.
Virtual Property Tours and Marketing: Virtual reality (VR), augmented reality (AR), and simple video tours are now common tools for property managers to showcase rental properties remotely. This allows potential tenants to explore properties from anywhere, improving convenience and attracting a broader audience.
Sustainable and Green Initiatives: With an increasing focus on sustainability, residential property management will prioritize eco-friendly practices. Energy-efficient buildings, green certifications, and sustainable amenities are becoming more prevalent to attract environmentally conscious tenants and are a great talking point for property management company differentiation.
Tenant Experience and Amenities: As competition for tenants intensifies, property managers prioritize tenant experience and amenities. Communal spaces, fitness centers, co-working areas, and other shared facilities will become standard offerings in residential properties and programs like "Resident Benefit Package" are now standard in the industry.
Remote Property Management: Advancements in technology enable property managers to oversee properties remotely, leveraging video monitoring, smart locks, and automated maintenance systems. Even such mundane activities such as tenant move-in can be done remotely through virtual or self-serve means. This leads to more efficient operations and potentially reduces on-site staffing requirements.
Flexible Leasing and Co-Living Spaces: The concept of flexible leasing arrangements and co-living spaces may continue to grow in popularity, catering to the needs of a mobile and diverse population. Accessory Dwelling Units (ADUs) are popping up throughout the company as building permit restrictions are eased in an effort to create more housing. This creates opportunities for property management companies to tap into the sharing economy as more homeowners look to Airbnb a room or ADU.
Regulatory Changes: Property managers need to adapt to evolving regulations and policies related to tenant rights, data privacy, and fair housing practices. Staying compliant with the law will remain a critical aspect of property management. This also creates a distinct opportunity to generate business from the DIY landlords who find it difficult to keep up with Federal, state, and local tenant-landlord laws.
While the future is uncertain, it is very bright for our industry! The actual trajectory of residential property management will be influenced by all of the factors mentioned above, with economic conditions layered on top. As we move through the rest of 2023 and into 2024, these trends and potential developments will continue to evolve and shape the landscape of the property management industry. Let the experts at Property Management Brainstorm guide you through the coming months!