Why the Old Way of Rental Property Management is Dead
The old way of rental property management is set for a shakeup and there are many reasons why it’s time for the industry to wake up from its slumber and embrace change.
Landlords often complain of being plagued by high property management fees, missed rental payments and unruly tenants. Property managers often fail to disclose property damage or property maintenance issues. Left unattended for a long period of time, these could cost thousands of extra dollars to a landlord.
The repercussions of appointing an unreliable rental property manager are compounded for landlords who own multiple tenanted properties.
It’s not getting easier for property managers either. Faced with an increasing pressure to drive costs down, improve efficiency, competition from new entrants and market consolidation, property managers are finding it harder to stay competitive using an archaic model of property management.
The recent growth in the Australian property market has resulted in some property managers taking on the responsibility of handling more properties than they can handle. This makes it harder to dedicate time and attention required to provide landlords with a superior client experience.
Increasing pressure to reduce costs, improve efficiency and combat competitive pressure is a clear indication that the old way of rental property management is dead.
Given the situation, it’s clear that the market is in need for change and there are technologies in place which are already driving this change. These technologies will add new levels of transparency to rental property management and landlords will finally be free from relying on property managers who side with tenants instead of looking after their interests.
Here are some of the ways emerging technology is changing the old way of rental property management:
Screening Prospective Tenants Online
Using advanced software, tenants can be screened to ensure they have the financial capacity to comfortably make rental payments and are of good standing. The latter is important to ensure they will maintain the tenanted property in top condition.
One of the newest tools is social profiling. Landlords can do a quick check on prospective tenants by looking at their social media profiles such as Facebook, LinkedIn, Instagram and Twitter to get about the tenant seeking to rent their property.
They can then decide whether the social profile matches what they are looking for in a tenant.
Rental property management apps make it simple for landlords to log in to the secure online property management and view their entire portfolio at a glance.
They can not only view when the rental payments were made, but also details of any repair or maintenance activities, including the costs incurred.
This saves an enormous amount of time as they no longer have to indulge in an exchange of emails or phone calls with property managers. It also ensures there are no cost overruns and the expenses are kept within budgetary limits.
Making Property Management Fees More Affordable
Adding to a property portfolio brings its own set of challenges, not the least property management fees, which can differ depending on the property manager, especially if the properties are in different states across Australia.
The latest online property management systems enable landlords to enjoy the simplicity and convenience of a single low level of fees. This makes it easier for them to compute their profitability and grow their property portfolio without worrying about high property fees which can eat into their profits.
Freedom from Interacting With Multiple Property Managers
In the traditional model of rental property management, landlords were accustomed to interacting with several property managers who were responsible for the management and maintenance of their properties.
One of the most common complaints expressed by landlords is the enormous time required in responding to emails, taking phone calls and constantly following up on maintenance and other matters related to their properties.
With some rental property managers swamped with work and others who just can’t be bothered to respond in a timely manner, landlords aren’t able to take action on a task which needs to be completed.
Technology has now made it possible to appoint one rental property manager for all properties across Australia. The added transparency provided by online property management systems compels the dedicated property manager to inject a sense of urgency into their tasks, as landlords can log in to the platform and monitor when and whether they have taken action on an allocated task.
What’s In Store for the Future
The future is looking exciting for the rental property management industry, most of this will be driven by technology. For instance virtual reality will enable prospective tenants to visualize what the property will look like once they have furnished it.
With the help of machine learning, property managers will be able to identify new patterns they may not be able to uncover on their own such as a trend where a large number of immigrants flocking to a particular suburb drives the demand for rental properties. This will help them make data-backed decisions instead of relying on what’s occurred in the past.
Improvements in AI (Artificial Intelligence) technology will give rise to an increasing use of chatbots which will be used to capture data, generate leads and help in providing answers to simple questions without the need to speak to a property manager.
So what does this mean for property managers, landlords and tenants?
It means property managers who are making use of archaic systems will be at a huge disadvantage and will struggle to compete in a tech-aware market. Where it was easy to get away with property management fees of 6 to 7%, property managers will have to wake up to the reality of lower fees without compromising on the level of service.
Aside from enjoying lower property management fees, landlords can expect to attract their ideal tenants at much lower costs by generating higher levels of exposure for their listings on social channels. This will help them increase profits, and lower vacancy rates, the later a critical factor in a falling property market. They will also be able to able to keep track of rental payments and contact their property manager immediately if there’s been a delay. Fewer disruptions mean improved cash-flow, higher occupancy rates and peace-of-mind.
Tenants can rest assured, landlords are aware of any repairs which need to be carried out on the property and expect property managers to attend promptly to their requests.
Technology has invaded the realm of almost every industry, and property management is not immune to change. It’s important for property managers and landlords to accept the reality, keep their finger on the pulse and be prepared to react to changes which will invariably come along and shake up the industry.