The Future of the Property Management Industry: Tech Trends for 2021

In recent years, the property management industry, once slow to adapt to new changes, has made a notable leap forward. From smart locks and self-showings, to blockchain transactions and real-time updates between landlords and virtual assistants — new property management technologies shape the industry and change the way property managers handle their day-to-day operations, making the real estate industry more organized and efficient.

Yesterday, machine learning and artificial intelligence seemed to be far-off ideas for property managers but, today, these are must-haves that need to be taken into account when it comes to societal digitalization in a global pandemic.

The year 2020 has been a difficult test for everyone and the property management industry is no exception. The COVID pandemic has undoubtedly thrown the market out of whack, forcing property managers and owners to 'reinvent the wheel' in terms of how they handle business.

Here are some of the main pre-pandemic property management industry statistics:

• More than 847,000 people employed
  
• Over 282,000 property management companies (in US only)
  
• About $88 billion in revenue generated per annum
  
• 16% of US GDP
  

Between 2015 to 2020, the apartment rental market in the US demonstrated a steady 1.7% growth which reached $173.4 billion in 2020. The COVID pandemic, however, has caused rental demand to plummet by 4.5% in 2020. This has, in turn, resulted in:

The rental market has experienced a large shift as property managers start to look for new opportunities in other segments of the market during the pandemic. To understand this change in demand, take a look at New York, for example. There, the number of rental listings experienced a skyrocketing 166% increase in 2020, which is also believed to be the highest spike in the last fourteen years. Other large cities in the US are not that far behind New York and seeing similar patterns.

With such an oversaturated urban market where offerings exceed the demand, it is no wonder that property managers and agents are starting to move outward. Now, suburbs and small towns are the main areas of focus. Taking into account that single-family rental units were on the rise in the past few years, moving the market outside of big cities and their constantly growing monthly rents seems to be quite obvious.

For tenants, this means lower rental rates and agents start to see new prospective markets. The economy, on the other hand, benefits from infrastructure investments and new jobs across states.

Once it became clear that there would be no fast ride through a global crisis, governments all around the world stepped in to provide specific measures to lessen the pressure on tenants.

In the US, most of the steps were taken at the state and local levels. According to JLL research, 34 out of 50 states decided to prohibit any evictions during the pandemic. Many mortgage payments were put on hold, and lots of large construction projects were temporarily frozen (except essential ones, like medical facilities).

The government has also recommended reducing the number of viewings and carrying them out with some sort of pre-screening process, where possible. This took the major share of the rental market online, and lots of viewings are now held virtually. Video tours, 360 virtual tours, and professional photoshoots are now helping managers and landlords to reduce physical and social contact.

All these measures have helped to keep the rental market from experiencing a complete shutdown, but the long-term impact of the pandemic is still yet to be discovered. For one, as the market recovers and society gets back to its normal life, apartment rental demands will start to increase slowly, again.

On the contrary, however, tightening of market regulations will result in an inevitable rise of rental prices in big cities, making housing in urban areas more expensive than ever.

In 2021 the government will need to ensure that the emergency measures taken in 2020 don't become new bottlenecks for the apartment rental industry.

In the pre-pandemic period, construction projects in big cities were backed up with high property costs and growing rental prices. At the same time, low-rent apartment offerings for low- and middle-income groups of renters were at a minimum.

With the market shrinkage and change in tenants' preferences, more and more construction developers are forced to move out of the big cities to places where construction is only starting to gain momentum.

Another reason for change in these market priorities is the fear (due to COVID-19) of densely populated condominiums, which makes renters reside in remote locations or even mobile homes. In this regard, 2021 is also likely to be a year for increases in single-family detached housing projects.

Despite the fact that Millennials define today's tenant market, a major shift towards Generation Z in the tenant base is definitely on its way. Gen Z enters the workforce in a world of technology and a strong economy. They are more educated, tech-savvy, and underemployed, which means that the standard rules of the real estate market will not work for them anymore.

Such renters will more likely be attracted by free Wi-Fi, smart home technologies, and charging stations for electric vehicles, rather than BBQ grills or downtown proximity. This is something that should be taken into account by property managers.

On the other hand, seeing older generations like Baby Boomers or Millenials going through various financial struggles makes Gen Zers more conservative and financially-savvy. According to Realestateexpress, 97% of Generation Z plan to buy a home in the future. For property managers, this means that, in the coming years, tenants will opt for more affordable (yet functional) homes, that will allow them to maximize their savings for the future.

In 2020, COVID-19 served as a catalyst for many companies to upgrade their technological stacks. As remote communications became a priority across the world, rental agents started to look for ways to maximize the effectiveness of online interactions with their prospective clients. Automated messaging tools and video calls all work together towards a single goal.

This doesn't only apply to property managers and potential clients or tenants. Property management software allows managers to schedule laundry services, assign cleaning and disinfecting procedures, and much more.

Intelligent buildings, in turn, are no longer perceived as something fancy. Keyless entry systems and online card payments take in-person meetings out of the equation, while the ability to regulate heat, temperature, and moisture in the house is becoming a part of good hygiene habits (especially amongst the Gen Zers.)

In the near future of property management, both segmentation and specialization will play a major role.

As for industry segmentation, 2020 has shown that those who offer a property in a particular segment have more secure positions in the market, rather than those dealing with everything from low-rent apartments to luxury mansions.

While segmentation helps managers to set themselves apart from the competition, specialization is what brands them as reliable rental professionals that one can rely on. With property management activities starting to involve more technologies, skills, and regulations to be aware of, it becomes evident that prospective renters will look for certified professionals in the market in the first place.

The real estate industry has traditionally been a bit slower in the adoption of new tech trends in property management; however, booming property management technologies and new property management trends are taking centre stage in the market today.

The cloud is what makes us mobile and lets us keep our work activities at our fingertips. Cloud-based software and services eliminate the need to be physically present near a server to get information about tenants, including their contact information, moving dates, unpaid rents, etc. Now, all information is available on the go.

Not only does cloud computing make property managers' lives easier, but it also reduces operational costs and speeds up decision making.

At first glance, it might seem that smart home technology is a luxury, especially if we are talking about the rental industry where the goal is always to make a profit from the property you own or manage. But this is simply not true. Smart homes are beneficial for renters as well as landlords, for various reasons.

For renters:

Big data can give property managers a broader view of the market. Equipped with better knowledge of their tenants' past activities and preferences, managers can offer them more relevant properties. Rental managers can source tenants' data from websites, property management systems, or CRMs.

What's more, big data helps managers and landlords to get a better picture of what's going on with their facilities in terms of energy, water, and electricity consumption. Being able to constantly track all utilities in real-time keeps managers aware of their business in general and helps address unusual situations in a timely manner.

Virtual reality and augmented reality both play a part in the industry. Many managers are now offering 360-virtual tours for their rental properties. Some companies have gone even further, offering paper brochures that unfold as 3D-objects on clients' mobile screens once the client points the phone camera at the brochure.

VR and AR will also become helpful for those cases when the apartment comes empty by staging it with virtual furniture. This way, renters will be able to get a better understanding of the space before actually moving in.

Given the fact that digital communications differ from meetings in person, property managers are looking for ways to effectively communicate online to the fullest extent possible. This is where AI comes into play.

Chatbots, virtual robots, and assistants make renter-manager-landlord communication faster and more efficient. They are able to handle different types of operations — answering generic questions, getting to know customer preferences, or even holding virtual showings.

Another major advantage of artificial intelligence is that it is able to assess pricing trends, and make corresponding predictions and analysis (i.e. doing all the "digital footwork" for a property manager, landlord, or a realtor).

Automated security systems will help landlords and managers better protect their amenities. The fact that property is protected speaks for itself, increasing its demand among those renters who value security.

Renters can take full control of the place they are living in — watch video surveillance, reset codes, and enable or disable permissions right from their mobile phones. Some landlords even add drones to use them for area surveillance, making property security systems completely bulletproof. In upcoming years, such technology-driven properties will become a common thing in the rental market.

2021 promises to be a year of huge shifts and innovations in the real estate and property management industries. Generation Z "occupies" the tenant base, lots of renters have started to look for more affordable offerings in the suburbs, and property managers move their focus to overlooked segments of the market.

The post-COVID world will definitely set its own rules and it is in the best interest of market players to adjust to the latest trends in property management technologies. If you have a real estate business and are looking for some help from the digital experts, don't hesitate to contact us by sending us a message through Chat or via the form below.