21 Key Property Management Trends for 2021
Which key trends will impact property management the most in 2021?
A chain of events is driving trends in workflow efficiency, online financial management, tenant communications and rent negotiations, along with marketing power to gain marketshare.
Profitability, efficiency and a tenant focus are in. Growth is on the shelf for some companies, but by mid-2021, it will be among the big 4 again.
The tenant is the focus, whether it’s hanging onto apartment renters or attracting work at home house renters. Property pros will be improving their skills using the power of technology to reduce maintenance, improve workflows and grow higher rent profit.
The Transition out of Covid 19
By July 2021, a noticeable reduction of the impact of the pandemic will be seen. It will bring a return to the economy and thus increase rental demand.
At this point, you’re here because you’re more aware of these industry trends and economic trends because of the shutdowns. It’s about riding out the end of the pandemic to prepare for higher profits in the 2nd half of 2021.
Will the uncertainty and volatility and other threats disappear? Will technology stop bringing changes in software and service offerings? Not likely. 2021 will have its own new surprises. Software will be expected to be simple yet do more.
It highlights how events (pandemic, election, technology) can change the course of business, and strengthen trends that were underway. You must be on your toes now, looking ahead, even beyond this 2021 transition.
Trends Can Make or Erode your Business Advantage
The Top 21 Property Management Trends to watch are dominated by politics, social trends, new software and tech electronics along with all the amenities tenants wish for. Politics and the economic recovery will be the big new stories for 2021, but technology remains the driving force behind property management success.
Keeping on top of industry trends and improving your business should be a priority in 2021. Just being aware of stats, views, opinions and news in the property management and rental markets can help keep you ahead of the crowd, positioned for higher profits. Skip ahead now to our revised 21 major property management trends.
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Trends Impact the Bottom Line Quicker Now
Trending changes in technology and work processes respond to property manager, landlord and tenant pain points. It’s not the apps, services, etc. that matter. It’s how you manage changes. And the only way to do that will be with property management platforms that suit your business.
Modern property management software such as ManageCasa evolves to keep these challenges in check. Just by using ManageCasa, you can see trends and the effect of events on your bottom line. Using the analytics and reporting function of ManageCasa is very wise.
21 Property Management Trends for 2021
1. Efficiency: Huge reductions in staffing, cash flow, revenues, and rising overdue accounts receivable means having to run a property management business with half the funds. Thankfully, your property management software is designed to come to the rescue.
2. Business Growth: Whether by design or growth hacking, some landlords and property management firms will be intent on growing a little. Many expect some challenges, but as the economy picks up in 2021, fear and reserve will be replaced with hope and action.
3. Focus on Tenants: While efficiency, growth and profit were the goals in 2021, Covid 19 changed all that. With turnover growing like wildfire, and tenants looking hard at breaking their leases for greener pastures, property pros had to tune into their wants and needs. And this is very helpful for the long term, as tenants have changed in 2020.
More landlords will listen to their tenants via social media and their own property management platform. From predictive insights about who is going to leave, to observing communications effects on maintenance costs, a focus on tenants has real dollar value.
Key in the trending tech revolution is cloud-based, online property management software. ManageCasa as an example, provides a digital foundation for more profitable property management work. It’s an all in one platform that’s easy to learn and use. Tech isn’t complicated when developers build an amazing workflow product.
5. Demographic Trends: Millennial tenants are becoming more of the tenant market and what they want often requires high tech solutions. Without that technology, they consider a landlord backward or irrelevant. Landlords as well, choose property management companies based on tech expertise.
Without technology, a property management firm won’t possess the efficiency, competence and capacity to scale up to allow owners to achieve profitability.
6. Rental Market Demand: Housing construction starts will grow again as the economy reopens, and for the next 5 years.
In some cities, after 2021, apartment rental demand will increase in cities, (e.g., San Francisco, Boston, New York, Miami, etc) occupancy rates will fall.
7. Rent Negotiation. The market could be divided into 2 sectors: those who can afford rent and those who can’t. Those who can afford rent are on the move away from apartments in the cities, looking for more room and work at home freedom in a house. They’ll be willing to pay much more and they’ll want better services and amenities whether in a house or low-density townhouse/condo situation.
Landlords and property managers will have room to negotiate higher rents in exchange for improved amenities. House rents are rising everywhere. You’ll want to improve your negotiation skills and understand the playing field.
8. Returning Economy and Trade Tariffs: We’ve been through a very difficult time with massive unemployment in Australia, US, UK, Germany and Spain. Short term rentals have been obliterated while these units are converted into long term rentals. The tourism, restaurant, and entertainment sectors may not be revived for another year. Bottom line is that many tenants will experience difficulty paying rent in the first half of 2021.
9 . Government Restrictions: given how high housing prices are and how high rental prices have become in cities such as San Diego, New York, San Francisco and Los Angeles, the cries for rent controls will get louder in 2021. Restrictions such as rent payment and eviction moratoriums will continue as renters struggle with unemployment.
Large multifamily buildings will come back once Covid 19 is diminished, however developers will be offering huge concessions. Big developments near key transit locations will receive priority from government.
11. Interest Rates and Inflation: financing, wages, utilities, and operating costs will rise in 2021 thus cutting into your net income.
12. Software Technology: New software technology is offering improvements in simple accounting, time management, tenant screening, online payment, property maintenance and repair services, and property management analytics. Some offer complete solutions while others are woefully inadequate. Some might impose on your business creating additional costs and adoption issues. Which solutions and apps should you adopt in 2021?
13. Demographic Shifts: Baby boomers are finally retiring and the Millennial generation is out of their parents homes and into renting their own apartments. Many renters will continue migrating out of the cities to rent more roomier houses. Your rental products and management style will gradually be reshaped to suit them in 2021.
14. Startup Property Management Companies: We’ve all heard about the growth in accidental landlords. Buying rental income properties is popular and many are realizing there is big money in property management. They will want to get serious about growing their portfolio and formally launching a property management company.
These newcomers to property management won’t want anything to do with old PM practices involving spreadsheets, receipts, and paper check payments at month’s end. No, they’re not trained pros and they’ll want to simplify right away using property management software.
15. Industry Consolidation: Big property management conglomerates are entering the independent property rental market. What are they looking for in properties or in property management companies they’d like to acquire? What services will they offer, e.g., maintenance).
16. Property Management Specialization: Given growing complexity in PM licensing requirements, government legislation, lender regulations, insurance requirements, environmental constraints, and accounting and taxation property management professionals have begun to specialize. Will expertise in any area give you a business advantage? What training and licensing must you obtain?
17. Rental Property Insurance: Changes in legal liability mean more renters should have their own renters insurance, and they will. Similarly, landlords will also need to be sure of their own landlord insurance. Is insurance coverage for them a value add for your company?
18. Digital Amenities including Keyless Entry, 5G and Free Wifi: Here are some more benefits tenants love. It’s for large multifamily buildings or large portfolio managers to either provide free wifi or create it as an affordable option for tenants. Wifi may be the coin-operated washing machine of 2021.
19. Smartlocker Storage: We’re in the era of Amazon. Amazon’s growing share of retail shopping is shocking. Tenants will need some way of accepting packages at their apartments, many of which don’t have suitable storage. Smart lockers allow them to pick up parcels when they can. The tenant receives a digital message and unlock code on their smartphone. Yes, another app.
20. Property Management Marketing: Given the complexity of property management today and how new client opportunities are happening as landlords scale up portfolios, property management companies realize they have to market their services better. Otherwise, competitors will gain marketshare.
Managers will look to social media, PPC ad campaigns, and website content to build presence in the complete absence of in-person promotion. They’ll add subscribers and build a loyal audience online. They’ll generate broader reach to build a quiet buzz about their businesses.
21. Greater Demands from Owners. Owners see what’s available via other property management services companies. They’re looking for better financial reporting, help with rent collection and evictions, and advice on asset management.
Some are turning to lead generation and brand building strategies. Using social media advertising and content marketing on their website, the best companies will be making noises this year. Building a brand and communicating services will drive new business in growing markets.
Ever improving technology is the asset that gives property management firms a competitive advantage. Continuously applied, it pushes the modern company ahead one day at a time, until competitors simply can’t keep up. It’s death by a thousand cuts for those who don’t focus on tenants and streamline their workflow processes.
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These are just a few trends in property management software to be aware of in 2021. More are coming and we’ll let you know right here. Subscribe to our blog for continuing insight on technology and housing trends.
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