Find out where property management is headed as an industry and what tools you need to build your business.
With Covid-19 restrictions and mandates finally easing, the conference circuit is ramping up quickly. One of the first conferences I attended this year was the recently held PM Grow Summit in San Diego, CA.
This conference and tradeshow brings together property management owners and managers who seek to grow or improve their business. There were some good takeaways from this summit, which signaled where the property management industry is headed.
Consolidation is here to stay
One of the clear takeaways from the conference is that the property management industry is at the beginning of a consolidation period. Just like the consolidation of real estate brokerages that accelerated in the past 10 years – think Compass buying everything up — the same is becoming true for property management.
Why is this happening now? Property management companies have been around forever, and have never been shown to “Wow” investors with overwhelming returns; it’s always been challenging work for modest reward.
Now, however, money is cheap – interest rates are low, though rising – and some hedge funds and private equity companies don’t need homeruns; they just need to beat their cost of money. Along the way, these investment companies predict with size and scale that they can cut costs and squeeze more out of their new property management investments.
Additionally, many of the larger property management companies were started by “mom and pop” owners, building their business from the ground up. Many of these owners are part of the baby boomer generation, and they see the exit strategy, the proverbial light at the end of the tunnel. Expect your local firms to buy one another out, with national players swooping in at the end for the big prize.
Automation is changing PropTech
Property management has always been about creating systems and processes to cut down on repetitive work. PropTech, aka property technology, is the buzzword in the industry these days as companies find the best “tech stack” to automate multiple facets of their businesses.
Companies like Lead Simple and Monday allow for planning and automated workflow – emails automatically sent to owners, tenants, and others. For instance, when a unit turns over, there may be a whole process – notifying an owner, re-keying, updating appliances, electrical work, painting, and more. Instead of creating a written flowchart on a whiteboard, apps will let you create a process and then automatically implement it.
With automation, communications and works orders can be automatically sent out at set times. That all said, it still takes a human to plan, tweak, and supervise these apps to ensure they’re running smoothly, so like most technology, these are here to support, not supplant.
Outsourcing is adding leverage
Outsourcing is gaining in popularity because it’s solving a pain-point for property management companies: giving back time. Too often, property managers are handling time-sensitive tasks that grind business to a halt. By having companies or remote assistants handle some of these tasks, you free up property managers to more effectively do their jobs.
Maintenance requests, for instance, have so many variables that it takes a lot of effort to coordinate, remedy, and follow-up in order to ensure a request was properly completed. Instead of a property manager handling that tedious multi-step process, what if it could be outsourced?
Companies like Latchel and Property Meld are making themselves available to property management companies to do just that. They handle the maintenance requests from owners or residents, dispatch vendors, and track the work along the way. [Author’s note: We have not utilized either company… yet.]
Outsourcing to remote assistants (RA’s) has long been popular, but it’s had its ups and downs. Many of these remote assistants are just that: remote. They’re not local, nor even in the United States. During the growth in popularity of RA’s, complaints were common about communication problems and misunderstandings. But RA’s and their training continue to improve.
A company like Anequim hires college-educated, English-speaking employees in Mexico. By doing so, Anequim is helping to create middle-class jobs in Mexico, while offering less expensive labor to U.S. property management and real estate companies. Depending on the pay and skillset, these RA’s are available to take calls, do light bookkeeping work, and coordinate maintenance requests with vendors.
Whichever strategies or tech platforms you decide to implement, you’ll add leverage and free yourself up to do more of the essential tasks that create value. When deciding where to start, take the time to talk to others about training and implementation to ensure that you get the most out of the systems and processes you integrate into your property management setup.
Chris J. Henry, General Manager, Prudent Property Management
Whether you’re self-managing your property, an investor looking for expert property management, or a member of the legal or fiduciary community looking for trusted and experienced property management professionals, Prudent Property Management offers a full-service leasing and management solutions throughout Marin County.