Why the Old Way of Rental Property Management is Dead
The old way of rental property management is set for a shakeup.
Time for the industry to wake up and embrace change.
Landlords 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.
Unreliable property managers are a nightmare for landlords who own multiple properties. To make matters worse, it’s not getting easier for property managers either. Faced with increasing pressure to drive costs down, improve efficiency, fight competition and watch market consolidation, property managers are finding it harder to stay competitive using an outdated model of property management.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 the 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.
It’s clear that the market is in need of change and there are technologies in place already driving it. These technologies will add new levels of transparency to rental property management and investors will finally be free from relying on property managers who side with tenants instead of looking after their interests.
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.
Investors can view when rental payments are made and the details of any repairs or maintenance activities, including expenses.
Complete visibility saves an enormous amount of time. Investors no longer have to waste time in an exchange of emails or phone calls with property managers. In addition, visibility ensures there are no cost overruns and that expenses are kept within budgetary limits.
Making Property Management Fees More Affordable
Adding to a property portfolio brings its own set of challenges. Most notably property management fees, which differ depending on the property manager and location. This is especially true if the properties are in different states across Australia.
The latest online property management systems enable landlords to enjoy the simplicity and convenience of single low-level fees. This makes it easier for them to understand their profitability. Investors are primed to grow their portfolio. What’s more, they don’t have to worry about high property management fees eating into their profits.
Freedom from Interacting With Multiple Property Managers
In the traditional model of rental property management, landlords had to interact with several property managers who were responsible for the management and maintenance of their properties.
The enormous amount of time required to respond to emails, take phone calls and constantly follow up on matters related to each individual property is the most common complaint made by investors.
In the current landscape, some property managers are swamped with work and others just can’t be bothered to respond in a timely manner. As a result, 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 makes property managers act with a sense of urgency. Property Managers now know that landlords can log in to the platform and monitor their activity.
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, prospective tenants will be able to use virtual reality to visualize the property once furnished.
With the help of machine learning, property managers will identify patterns that may not have been visible before.
Property Managers will be able to make smart investment recommendations based on trends such as high demand suburbs popular with new migrants. This will help property managers make data-backed decisions instead of relying on their interactions with the property.
Improvements in AI (Artificial Intelligence) will give rise to the increasing use of chatbots in the Real Estate industry. The industry will use chatbots to capture data, generate leads and answer questions. Therefore owners and tenants won’t need to constantly speak to property managers.
So what does this mean for property managers, landlords, and tenants?
In a tech-aware market property managers using archaic systems will be at a huge disadvantage. It was once easy to get away with property management fees of 6 to 7%. Property managers will now need to 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. Landlords will be able to keep track of rental payments and contact their property manager about any delays. Fewer disruptions mean improved cash-flow, higher occupancy rates, and peace-of-mind.
Using technology like yabonza, tenants can notify landlords of repairs which need to be carried out. As a result, tenants can expect property managers to respond promptly. Overall new technologies will continue to create efficiencies for both tenants and investors.
Technology has turned almost every industry upside down, and property management is not immune to change. Importantly property managers and investors need to accept the new reality and be proactive when facing large scale industry change.