Editor’s Note: The following is a conversation from the third episode in the video series, The 2020 Industry Report Explained: Tech-Enabled and Human-Centric, which features interviews with Robin Young, Sr. Researcher at Buildium. In this session, we’ll cover the technology trends that are taking hold in property management businesses—from Buildium’s 5th Annual Industry Report in partnership with the National Association of Residential Property Managers (NARPM).
Tony: Tony from Buildium here, the software that helps property managers control the chaos, sharpen their operations, and ultimately, grow their business. Thanks for joining us for this three-part video interview series, The 2020 Industry Report Explained. I’m here again with Robin Young, Senior Researcher at Buildium, the force responsible for driving the 2020 Industry Report across the finish line each year.
In this series, we’re going to break down the findings and distill the key trends that we identified. Again, this is video number three, so you can check out one and two through the links below.
In your second video, you talked about why establishing local expertise is so important for property managers. Now, today, we’re going to talk about technology; and how really, there is so much opportunity there for property managers in 2020.
What are the renter and owner preferences that are really creating fertile ground for technology?
Robin: The property management sector has been slower than other sectors of real estate to adopt technology. But over the last year, we actually saw big jumps in adoption of different tools to automate their businesses. Consumers having access to all the comforts of modern life in just a few taps has really changed how we all react to different areas of our lives. Property managers are noticing that their renters and owners want real-time responses and solutions to problems. And so—both due to customer demand, and also property managers’ desire to speed up the pace that their business runs at—that’s what’s driving technology adoption this year.
Tony: How are property managers adopting newer technologies?
Robin: Across the board, technology use among property managers went up by 4 points in the last year, which is pretty significant. The biggest jumps that we saw: Accounting software saw an increase of 18 points among property managers over the last year. Other big tools have been document sharing, like leases and legal documents; client portals that allow owners to log in and see reporting on their own properties; and then digital communications—basically, communicating with renters and owners the way that we all communicate with each other.
Property managers… they’re looking for technology that automates processes that feel tedious as they’re trying to grow their business. And they’re looking for easy ways to communicate and share information and documents with renters and owners, which is something that renters and owners are, in turn, asking for.
Tony: What are some of the challenges and complexities that you see technology bringing for property managers in 2020?
Robin: We saw a really interesting anxiety come up among property managers’ survey responses this year. What’s happening is: in the same way that technology has allowed property managers to simplify and optimize their business processes, landlords are starting to discover the same tools.
They’re saying, “Oh, we can accept and receive payments with Venmo or the Cash App. We can coordinate showings and automate rental listings.” All of these technological capabilities are available to consumers. And so property managers are finding that it’s harder to make the case for their services when clients think that they need apps—and apps alone—to make their rentals more efficient.
So, property managers… they have to find a way to quantify the X factor that they bring to a rental owner’s business. And we believe what that is is this human element that can’t be taken out of the property management field—and shouldn’t be taken out of it. Now, it’s up to property managers to figure out how to quantify that by saying things like, “Look how much time and money you save by keeping your units full with high-quality residents,” averting maintenance emergencies that could cause really expensive fixes down the line, and just freeing up landlords’ time.
Tony: 100%. We’ve heard it loud and clear that personalizing your approach for your residents is really central to this challenge.
How can property managers go about personalizing their approach for residents?
Robin: So, when it comes to keeping your residents in their units year over year, it’s really important to look into the specific preferences of the people in your buildings. I have to give a plug for our report, because this is something that we look into extensively. We know that it’s not easy to figure out exactly what your renters want, and so what we do is break down renter preferences by age and geographic location.
So, you can say, “Oh, renters in New England want these particular amenities. Millennial renters versus Baby Boomers: here’s what will keep them in their units; here’s how likely they are to move out.” So we definitely recommend reading our report, of course; but also, I recommend surveying your residents personally. If you’re thinking of adding new amenities or services, definitely email your residents and see what their interest is—and figure out if the ROI makes it worth it for you.
And then, lastly, pay attention to feedback—not just from your current renters, but also renters who almost move in and then back out; or renters who move out faster than you were expecting them to. That’s a really great opportunity to collect feedback on what exactly fell short for them—whether it’s the rental, or the experience. It’s really valuable information, and I definitely recommend asking directly.
Tony: That’s a great point and lots of things there—lots of great actionable advice for residents.
How can property managers adapt their approach for owners?
Robin: As I mentioned in previous videos, there’s a big turnover happening in property managers’ client base right now. They’ve been used to—in the past—serving a lot of Accidental Landlords, who really depend on them for a broad range of services across their rental property. Investors are really interested in profitability; and even clients who only have one property, now’s the time that they are really leaning on their property manager to help them increase the profitability of their investment and make smart investment decisions down the road.
Also, in our report, we break down owner preferences by investor type, which is something that we use to figure out, “What does an Intentional Investor want from their property manager versus the Accidental Landlord client that you used to serve?” So, the specifics are in the report; but across the board, the major difference in 2020 is just that profitability is number one. And this is because cap rates are compressing in every market, and that’s just where we are in the economic cycle—so that’s really top-of-mind for both owners, and also for property managers in running their own businesses.
Tony: Right. We talked about that in the last video a lot as well. Cap rates are definitely decreasing. We’re also seeing the price of vendors skyrocket. So, profitability is huge.
When we talk about the human element, what do we really mean? How can technology be human?
Robin: At the heart of property management, it’s a service industry. The human element is undeniable; and as much as technology might allow property managers to simplify and speed up their operations, it’s really the customer service element of the job that can and should never be replaced by technology.
So, we recommend that property managers use technology in two ways: One is improving both the amount and the quality of the interactions that you’re having with your customer base—both renters and owners. And the second is freeing up your time from focusing on more operational things, to focusing on providing a more personalized, empathy-driven, customer service approach—that’s powered by technology instead of being driven by technology.
Tony: That’s a great way to look at it. Well, that just about does it for us today. So again, thank you, Robin, for joining us, and talking about all these amazing trends that we’re seeing. For those of you watching, you can get all of this and more in the 2020 State of the Property Management Industry Report, which you can download at the link below.
Now, this wraps up our video series; but if you haven’t seen them, the links for videos one and two are here as well. Be sure to download the report for a full summary of all the trends we discussed that we expect to impact industry in the years to come. If there are things that you’d like to know about or other technology trends that you’re seeing, please comment below, as we always love hearing from you. Until next time.Read more on Industry Intel