Property managers rejoice! The future of property management from 2020 will see the rise of property managers as the lifeblood of the real estate industry increasing in importance and integral to new revenue and business models.
The twenty-teens has been a stressful decade for property managers with increasing expectations of services from tenants and landlords enabled by a raft of real-time technology that has made life faster, busier and more hectic. But I’m predicting better times ahead. Here’s my reading of the tea leaves.
Every property manager will be AI-enabled
One of the biggest difficulties of being a property manager currently is the constant stream of communication that all PMs deal with – from SMS to emails, phone calls and even message apps. For many PMs, even going to the loo is met by urgent calls while taking a long lunch is an unheard-of luxury rewarded by a tsunami of emails. According to Patrick Hill from Property Realm, a typical PM receives 20,000 emails a year, 7,000 phone calls a year, and about 6,000 SMS’s.
But the bots are changing that (notably, RITA and CLAIRE) by responding to inquiries, logging maintenance requests, capturing and sorting data and prioritising tasks. The big change for PMs is they will only deal with issues that are escalated because they require more creative human problem-solving.
This is a major development for property managers. It changes everything. It frees PMs up and removes significant ongoing stress which over time has become debilitating for our mental health. It gives highly valuable parts of our businesses time to think about what our clients really want from us and what we could do to offer new services and value.
Property management admin will become more automated
It’s not just AI helping property managers with tenant and landlord communication. A range of new generation apps and blockchain technology is going to dramatically change traditional property management processes in the coming decade.
Regular inspections are already becoming easier courtesy of inspection apps, and filling in paperwork is taking less time through connections to CRMs and digital signatures.
We have started questioning the need for old school trust accounting with platforms like Managed, and OurProperty, but expect it to go further with changes to rental bonds from industry transformers like Snug. Some of these are bleeding edge at the moment, but over the next 10 years they’ll become mainstream, and who knows, maybe even the legislation will catch up.
The outcomes for property managers have further reduced demands on their time while being able to give landlords greater transparency and earlier access to funds while making the cost of renting cheaper for tenants.
Equally, it will take less time to chase quotes, and faster to book repairs and maintenance from trusted suppliers.
PMs will drive the rise of property-as-a-service
One of the most exciting things coming down the pipe in residential real estate is the concept of Property as a Service. It is property managers who will lead this charge.
With PMs freed from the busy of managing their rental portfolios through automation and bots, there will be capacity for taking on new work. For some, this will be a larger rental portfolios. For others, the expansion of maintenance-styled services to help property owners.
One of the great ironies of renting versus buying a property in Australia is that if as a renter paying $250 a week, there is an issue requiring repairs with a property, you can simply ask for help and it is fixed. But if you pay $2.5m for a home, you’re on your own in terms of dealing with the chaos and inconvenience of repairs and maintenance.
In the new decade, smart real estate agencies will start to offer their buyers property concierge subscriptions. This will allow property owners to pay a monthly amount – or perhaps quarterly or annual (there are no rules yet, so let’s get inventive!) – to have someone to call when they need help. PMs will coordinate tradies, oversee repair quality and may even offer annual inspection and audit services. That means things like smoke alarms, hot water services, fencing and appliance quality are monitored and replaced without 20 emails each time.
And as smart devices increasingly become part of our homes, it will be PMs who help property owners manage their ‘digital keys’ and do handovers at sale time.
This extends an extremely valuable revenue stream inside real estate offices while also building customer loyalty. Will a property owner who has been faithfully served by their concierge team for the 15 years choose a different agent when it comes to sales time? It’s highly unlikely.
Property management will become the lead generation engine of sales teams
The value of property-as-a-service is that PMs and real estate offices start to get a detailed history of the maintenance and quality, not just of properties being rented, but entire neighbourhoods. That’s one hell of a dataset.
With insights into forever homes as well as rental properties, PMS and their friendly AI will have access to datasets that provide extraordinary insights into the mindset of property owners, which is the holy grail of prospecting. This puts PM teams at the heart of sales generation.
Property management has always been the asset inside real estate offices that determined value, but sadly too many PM teams and sales teams have operated as separate entities. This new development will bring sales and management closer and create a sense of unity of purpose in delivering great property services to all clients.
Renting – and property management – will get more flexible
Holiday lettings have long been a part of residential real estate offices in popular tourist destinations and the rise of apps like Airbnb have made the idea of staying and renting private homes more popular.
But managing a property – as any property manager knows – can be hard work, and increasingly short-term landlords are looking for support and help. Into this mix are coming new rental options. These include mid-term rentals for professionals on secondment. It also includes new build to rent options where developers retain ownership of new apartment buildings that are fully rented.
Property managers will play a pivotal role in helping landlords understand their options to maximise their investment – which might be rental yields, capital growth or just a bit of cash flow on their family home while they travel for a few months.
Housing affordability issues are further creating new generations of permanent renters who are looking for more security than just a 12-month lease. Expect to see increasing demand for longer-term leases with new kinds of negotiated rent rises managed by market experts.
Finding – and keeping – the perfect tenants will be easier
With all these changes coming down the pipe, tenants will also benefit. Rather than filling in an application for every property that might be suitable, tenants will fill in an application once. Their desirability as a tenant will be easily assessed because their application will be connected to their social media profile and verified through financial apps.
Tenants will be able to inspect properties virtually and be better matched with potential flatmates through sharing apps.
Gold star tenants will be highly sought after who will negotiate good deals on the best properties for longer periods and with guaranteed rents. Tenants will enjoy faster response times to repair and maintenance issues as well as receiving support after hours.
Property management will become a more professional and structured career
The current profile of a residential property manager in Australia is a young woman in her 30s who has worked in the industry for about 6 years, but in her current job for two, according to research from Rockend.
The industry is currently held back by a legacy of heavy admin and accounting – traditionally ‘women’s work’. This has relegated the work of property management to the girls while the boys went off and ‘did sales’.
The outcome of this has been an industry that’s been underinvested in most real estate offices, has high staff turnover, limited career progression, ad hoc processes and average pay.
But this will change this decade. The role of property managers at the heart of real estate agencies managing property-as-a-service businesses demands new skills, new training and career structures.
Property managers will be more likely to seek additional qualifications as property investment advisors and come into the industry from other areas including data analysis, change management, marketing, and management.
Expect too, to see larger property management businesses and increased specialisation in property management where businesses sell leads on to real estate sales agencies.
The end of the ‘tenants and landlord’ mentality
With all these changes on the horizon, it’s time to change our language around property investing and renting. Landlord is a word dating back to medieval times, while tenants are equally ancient and there is a sense of subservience in the terms.
In the decade of 2020, recognising the value of both quality renters and property investors by changing the words we use will help change all our thinking. With the new business models at play, after all, both are customers who delivery extraordinary value and referrals to residential real estate businesses.
It is time to move towards imagining what’s possible. And stop being burdened by the past.