Residents are living it. Economists are tracking it. Property managers have noticed it.
A market shift has reinvented the idea of “home” for the average renter, as well as what they expect from their property managers and landlords.
We’re no longer in an industry that can focus solely on managing the property itself—that’s only half of the equation. In 2019, it’s not just about the property being managed, or the owners who’ve invested in the property: It’s the resident experience that occurs inside of it.
Who’s in the Driver’s Seat?
We’re accustomed to the housing market traditionally being driven by the simple forces of supply and demand. When there’s more demand for rentals than supply, property managers and owners can set the rules, name their prices, and generally be in the driver’s seat, right?
But it’s no longer a simple math equation. Seismic cultural shifts are causing renting behaviors to change: Millennials aren’t able or willing to invest in a thirty-year mortgage. Baby boomers are downsizing to rentals that they won’t have to maintain as they age. And with both rents and home prices soaring, the available supply doesn’t necessarily align with what residents can afford.
So, why is the resident experience so critical in this new environment?
Property managers and owners’ main focus is, by nature, maintaining a profitable unit; but to the residents who live there, that unit is their home, and their experience there makes all the difference in the world. A rental property can’t be profitable without happy residents to occupy it and that’s why we believe that the property managers who shift their focus from the unit to its occupants are going to win in the long run.
In 2019, supply and demand are no longer the sole deciding factors as to who’s in charge in today’s rental market. Technology, reputation, and access to information have changed everything.
The True Impact of Technology
There’s a lot of commentary about how technology is disrupting the property management space. Year after year, renters prove their growing preference for managing every aspect of their residential experience from the cloud. Last year, in Buildium Renters’ Report, 87% of Millennials said they’d prefer to take care of rental processes online. More surprisingly, Baby Boomers also showed a strong desire to embrace technology in this area: 60% would like the convenience of paying rent, filing maintenance requests, and signing leases online.
But it’s not just about the technology itself—while virtual reality tours of a property might be an exciting feature to consider, our research tells us that it’s the deeper impact of technology that is at the root of this power shift. It’s the way in which the mass adoption of technology has changed our day-to-day lives that is changing the real estate industry as we’ve known it.
Technology—increasingly centered around smartphones—has changed nearly every facet of how we live: from how we communicate, navigate, shop, and manage various elements of our lives, to what we expect from the people that we interact with as consumers. We want the services we rely on to be easy, instantaneous, and at our fingertips.
So, when we look at industries that have been disrupted by mobile technology, it’s largely focused on the transactional experiences that have changed, and how much more choice the consumer has—whether in retail, food, transportation, finance, hospitality, or real estate.
With that comes gargantuan shifts in consumer expectations of convenience, immediacy, and access to information. The ever-present availability of online information also enables prospective residents to be more educated about their choices. Beyond that, they can share their thoughts and opinions in a second, with the ability to reach a broad audience in a way that they never could before.
This leads us to the impact of technology that we’re not talking about, but which continues to shift the resident/property manager dynamic: Reputation.
All Eyes On Your Reputation
In property management, reputation is everything. And residents, with the entire internet in their pockets, are now the ones who have the ability to build your reputation for you, beyond your control. In seconds, their opinion becomes truth. That information is then available to anyone, and will become a factor in the decision-making process of future residents—especially if it’s an extremely positive or negative review.
The importance of online reputation has become so ingrained in our behavior, that a whole industry has sprung up around it. The idea of objective third-party reviews are central to the buying process and companies like Yelp, Facebook, Apartmentratings.com, and CheckYourLandlord.com are now gathering reviews of property managers. Taking it even further you can find companies like FakeSpot that help people identify fake reviews on e-commerce sites. This is simply to make the point that the prevalence of crowd-sourced information has hit every industry you can possibly imagine for consumers. It has admittedly taken longer to arrive at property managers’ doorsteps, but now it’s here—and it’s not going anywhere.
Creating a Resident Experience
To put it simply: Residents aren’t looking for properties—they’re looking for a place to call home. By focusing on their experience and investing in your relationships with renters first, property managers will break through to a new, transparent way of doing business that will only help them evolve more quickly, while maintaining a healthy online reputation for their business.
It’s not about managing the property. It’s all about the experience that you deliver to the resident.
Residents, not properties, are a property manager’s biggest asset. Among our customers, we’re seeing that today’s most successful property managers are focused on the residents inside the property first. They’re those who figure out how to create and maintain a home that generates long-term, recurring revenue through amazing customer service—and the reputation those residents create on their behalf reflects that commitment.
While the property and its owners will always be a top priority, residents need to rank just as high on this list. Valuing the relationship between property manager and resident, and aligning every facet of the business around those connections and interactions, has never been more tied to success.