The challenges of COVID-19 have provided some surprising upsides for multifamily real estate managers, including taking business online with virtual tours and contactless leasing. But some companies are falling behind because they don’t have the right tech tools. And that’s true in any market.
Without scalable property management software, companies lack agility when markets suddenly change and new challenges along with opportunities arise — including property acquisitions. According to Realtor.com, as of May 2020 the housing market in New York City is a buyer’s market. With rental demand remaining high in the New York metro area despite the impact of COVID-19, many real estate companies are looking for apartment properties to add to their portfolios.
If you’re not currently using a property management software solution because your portfolio is still small, now’s a great time to adopt one. Making the transition from a small team to a multi-site business requires having the right technology in place that promotes expansion, and best practices point to using a mobile property management platform powered by a single database.
When it comes to choosing the right software for your business, why is scalable better? A scalable solution will grow with you and ensure efficient operations by adapting to your business and supporting an increasing amount of data and more users. At the same time, a scalable solution won’t require more staff or overhead to accomplish more for your business every day.
Play to Win
Even if you’re using software for some daily tasks, if you’re still using paper anywhere in your organization, it’s time to eliminate it. From processing paper rental applications and performing manual background checks to keying in and then depositing paper rent checks at a bank, paper will bog you down, cause errors that expose you to risk and waste your staff’s time. None of that will help you increase revenue or grow.
It’s also important to remember that your competitors are likely doing these things much more efficiently online with automated workflows and electronic deposits. Digitizing your transactions is a great first step in doing business better including reducing operational costs in our new normal. You’ll also free up time for your staff to do more important things such as focus on leasing and customer service to retain the quality residents you already have as well as attract new renters.
If you’re wondering where to start, look for a fully integrated property management platform with a single, cloud-hosted database. Managing the entire real estate lifecycle with software can help companies with any size portfolio succeed in any market. Cloud hosting will help you avoid IT overhead and capital costs while also ensuring business continuity through data protection and backup. Be sure to choose a platform that lets you seamlessly add suites of solutions to cover your end-to-end business needs from front office to back office.
A scalable platform will allow you to seamlessly add services as needed, including online payments, procurement, invoice processing and vendor management. Find one trusted provider to work with so you can avoid third-party integrations and data disconnects along with the difficulty of managing various vendors. As you grow you want to focus on your business, not your technology.
Start With a Single Database
It bears repeating: choose a property management solution that operates using a single database. By centralizing portfolio-wide financials, operations, leasing, maintenance management and more in one cloud-hosted database, you needn’t worry about data accuracy or security. Having one source of truth for your portfolio data provides total visibility and real-time KPIs.
With a scalable solution that includes built-in financial accounting and reporting, you can acquire properties and add users while you stay on track with budgeting, forecasting and rental pricing in addition to daily operational tasks. You also get predictive analytics and prescriptive recommendations when you leverage your portfolio data using an asset intelligence solution.
Disparate databases inhibit business growth because they require considerable maintenance and must communicate with each other to synchronize information. Further, it’s difficult to string together point solutions with third-party integrations to your property management data. With a single-database foundation established, adding ancillary services for your market will seamlessly provide a complete solution.
These services typically include marketing, screening and leasing, resident portals for online payments and maintenance requests, procurement and invoice processing. Many operators also utilize energy management including utility billing and revenue management as well as budgeting and forecasting tools.
Make Clients and Team Members Happy
For prospects and residents, include online apartment tours, applications, leasing and payments among other services they have come to expect. For property staff, automated workflows and electronic transactions save time for higher value tasks. Revenue management software integrated with your property management platform delivers smart rental pricing and planning to reduce stress for your leasing team and take away guesswork.
Executives will benefit from innovative asset management tools that incorporate AI and machine learning combined with your portfolio data. Full-business insight allows managers to be proactive and make smart moves in any market conditions. And none of this is possible without housing all your operational information in a single database.
Get Ahead in the Cloud
As touched on earlier, cloud hosting for your property management software will optimize performance and is considered industry-wide to be a best practice. You need to focus on your business if you want to grow – not your technology. Standardize your operations on a flexible cloud platform that lets you meet your current needs and is scalable to support future growth.
When you have a trusted cloud solution provider to manage servers, your processing capacity increases – but your IT infrastructure doesn’t. Necessary security measures include data recovery, encryption and around-the-clock server operation monitoring to protect your business from data loss due to hardware failure or power outages. Make sure you choose a cloud services provider with a database storage strategy capable of ensuring close to 100% application availability for business continuity and plenty of back up for disaster recovery.
Offer More to Your Customers
The real estate industry is currently at its highest level of digital penetration. From negotiations to collaboration and planning, almost every aspect of business can be executed online. Virtual property tours and video chat are surging in popularity. Online services for prospects and residents have been rising in demand and many properties are seeing less foot traffic. An increasing number of prospects are applying for units and leasing online, sight unseen.
While social distancing is certainly playing a role in the demand for online services right now, it’s clear that the trend for finding and renting an apartment online is here to stay. Even with high unemployment due to the impact of COVID-19, property management software is helping operators retain their valuable residents with tools to automate rent payment plans and deferrals.
Another multifamily trend is flexible leasing – opening up different units in the same building to a variety of lease types, ranging from traditional leases to short-term and student leases. This helps capture more opportunities, and software designed for it enables easy management of different lease types and terms.
Pivot to Online Marketing & Leasing
Many multifamily operators are finding success with a pivot to online marketing and leasing. Avenue5 Residential, a private third-party property management services firm, is one great example. With COVID-19 concerns requiring the company to close its property leasing offices to foot traffic – as is the case with most companies – Avenue5 further deepened its focus on promoting online options to residents at the onset of the outbreak.
It subsequently saw a jump in resident online payment adoption from 50% to 70%. April and May rent collections were strong and executives are optimistic about collections in the months to come. “We expect to see a long-term benefit as customers acclimate to the ease of paying online, and as our associates reduce the amount of time spent on manual processes,” said Pål Ottesen, chief financial officer at Avenue5.
Have you made an audit of your property websites lately? Websites that are SEO-optimized and connected to your property management database get the best results. First, they will help your properties be discovered by more renters searching the internet for availabilities in their targeted area. Next, they will help you convert website visitors into renters through a great user experience, including real-time unit availability, virtual tours and anytime leasing with online applications and automated approvals.
Self-guided tours that prospects can schedule online at their convenience have become very popular and can boost conversions as well as increase marketing ROI. Communication options are also a great idea, including chat bots for quick answers to questions, as is the ability to send a text message to a leasing agent. For prospects who become leads, an integrated customer relationship management (CRM) solution to automate lead management will make sure your team follows up with leads and residents without skipping a beat.
Leverage Tech for Happy Renters
As you focus on enticing and converting prospects through outstanding service, do you know if your current renters are happy? Don’t underestimate the importance of resident satisfaction, including its impact on your bottom line. According to the 2020 NMHC/Kingsley Associates Apartment Renters Preferences Report that surveyed more than 370,000 apartment residents across the U.S., the #2 reason residents move out is because they are dissatisfied with property management. When you offer around-the-clock online services including applications and renewals, rent payments and maintenance requests, you are likely to sign more leases and retain happier renters.
To do that, you need property management software with integrated online solutions including prospect and resident portals. At any time of day or night, in addition to online leasing and applications, you need to make sure your customers are connected to the services they need, from viewing ledgers to making payments and submitting maintenance requests.
According to the 2018 NMHC Multifamily Disruption Report, “As real time and personalized purchasing experiences become the norm, a lifestyle-focused apartment is as important as location and layout.” Today’s renters – especially Millennials – value smart home technology and consider it to be a more valuable amenity than a pool or gym. Plus, they’ll pay more for it.
When smart tech including thermostats, lighting, package management, Wi-Fi as a service and keyless locks is integrated with your property management system, you can help control utility costs and reduce risk while future-proofing your property.
“In apartments, smart home technology allows residents to remotely control everything from lighting and appliances to entry security. The technology is becoming so sophisticated that many systems report their own maintenance needs and use algorithms to order replacement light bulbs or eggs before they run out,” the NMHC report elaborated.
But that’s really just the tip of the iceberg. “Smart homes are great for residents, but the technology is even better for operators,” said Shawn Mahoney, chief information officer at Boston-based GID, which counts more than 21,000 apartment homes in its portfolio.
“Smart technology allows building engineers to monitor, control and constantly analyze all aspects of the building from anywhere, resulting in faster identification and response to systems issues as well as better problem prevention and property performance,” Mahoney added.
Appeal to Investors
Another savvy reason to use a scalable property management platform is to make your portfolio attractive as an investor vehicle. For those seeking an additional source of monthly income with a reliable cash flow, investing in rental property is the preferred strategy. A centralized software system can unify investment and property management operations into a single, fully integrated organization with total transparency.
Portals connected to the property management platform give investors easy access to important information such as rent rolls, attributes for each investment, market values, internal rates of return and cash flows. Giving managers and investors secure online access to lengthy financial reports and other documents saves a great deal of time and money, considering the cost of processing and mailing paper. Plus, the on-demand access provided by website portals inspires confidence among current and prospective investors.
One big reason that investors like multifamily properties is for passive income. The ability to scale a portfolio in this asset class is another draw. An investor can grow their portfolio a few units at a time, if they choose to be conservative. Commercial real estate typically has a higher barrier to entry when you’re talking about strip malls or hotels.
Since property managers take care of the day-to-day responsibilities for investors, when property management software is used, the management company is in a much better position to sell its services thanks to the efficiencies and best practices enabled by a mobile platform with a centralized database. When a property manager can offer online portals with around-the-clock access to asset information including financials, it’s in a strong position to attract investors who expect full operational transparency and reliable data on demand.
Use Your Data
In the recent past, many real estate companies made critical decisions based on questionable data compiled into spreadsheets. Now, new technology automates data collection and delivers advanced analytics that show a clear picture of a portfolio’s opportunities and risks. That’s big data, and if you’re still using paper spreadsheets to evaluate performance, you don’t have it.
Big data analytics are important because they help companies harness the accurate portfolio data in their property management system and use it to support timely business moves, more efficient operations and higher revenue.
You can’t manage what you don’t measure. Prescriptive analytics help drive performance by showing, for example, how much to potentially spend on marketing to generate the traffic needed to overcome upcoming vacancy or exposure. Instead of dropping prices, sometimes the right move is to adjust marketing spend. Big data will guide you to make the best decision.
Benchmarking is another valuable tool powered by big data. When a company can compare actual leasing, financial and operational data to a defined peer set, it can be more proactive and find opportunities to reduce costs. In addition to obvious operational issues, seeing the subtle inefficiencies of your operations will help you further promote growth.
When it comes to forecasting, a software engine powered by big data will give you optimal results by enabling finance teams to calculate budgets using actual property data and assumptions applied including occupancy rate, renewal rate and rent increases. With accurate projections based on the real data housed in your property management system, you can see a clearer picture of future revenue performance.
Get Ready for What’s Next
As real estate software matures to include advanced tech like AI and machine learning, property managers and executives gain unprecedented insight to navigate markets and seize opportunities to increase revenue. Thanks to online services, companies are also able attract, satisfy and retain customers and investors with more options than ever before available.
And in unusual circumstances such as the COVID-19 pandemic, scalable property management software can be a lifeline for businesses by digitizing operations and making services contactless while positioning for growth. But don’t forget to make sure your customers feel connected to your business and each other, even after social distancing is no longer necessary.
A strong brand with responsive websites and a compelling social media presence strengthened by excellent communication will help you attract and keep quality residents and entice new customers as your business grows.
Learn more about industry-leading property management solutions that can help you drive performance and shape good outcomes in any market.