2022 Property Management Trends Managers Should Know
- Increased Emphasis on Effective Leadership
- The HOA Management Industry Will Conslidate
- A Continued Emphasis on Personalized Customer Relations
- Labor Shortages Will Require Out of the Box Solutions
- Digitization of the Property Management Industry Through PropTech
- Connect With Us To Receive Support
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There are many property management trends in 2022 that property managers need to be aware of in order to stay ahead of the curve, drive property value and provide outstanding customer service.
In 2021, waves of transformation swept across the property management industry, seemingly coming from every direction. Property management companies have been challenged to absorb the impact of labor and material shortages, increasing regulations, industry consolidation and the housing affordability crisis. They’ve faced an increase in demands and expectations from their residents and clients, as well as the threat of competition from the institutional investors and management firms flooding into the single-family rental sector.
Increased Emphasis on Effective Leadership
You work hard to ensure your residents are happy, the property looks good and your operations and finances are running seamlessly. Every sidestep you take leads you to the end of the day where you’re left wondering how time got away from you. While you can continue to do all of these things on your own, the mark of a strong leader lies in their ability to delegate.
To be an effective leader, it’s important to have a team that matches your level of personal investment. You want a team who takes care to treat the business as if it were their own, the idea being that in a way, it is. Problems don’t often arise in the way we expect them to. So, it’s important to have a team with the astute knowledge to identify problems before they arise. When those situations do present themselves, you’re ready.
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Having an effective infrastructure helps you stay focused on the big picture, while your team can sweat the small stuff. What any company wants is to continue to grow, and the larger a company grows, the more time-consuming it becomes. Customer support, transaction disputes, bookkeeping, utility expense management, billing, all aspects of a business too much for any one person or even small team to handle on their own. Look for a company that specializes in providing the infrastructure that often takes years for small companies to build.
If you are considering delegating some of your business activities to an outside firm, it’s important to determine answers to key questions about the level of support you should receive. Will I receive live or automated support? Is support available on my work schedule? What kind of support will my residents receive? Effective leadership is one of the most important property management trends to keep tabs on.
Team members don’t have to consist of individuals working within your company. You can delegate all sorts of day-to-day tasks. Resident billing or utility management, for example, can be delegated to experts within the industry. Remember to explore your options; perhaps it isn’t feasible to delegate certain tasks, but there are always avenues worth exploring.
The HOA Management Industry Will Consolidate
We see the future of property management being consolidated into large-scale operators and boutique management companies – both operating with more tech and higher margins than what’s previously been considered normal.
Over the last few years, there’s been a lot of institutional and Venture Capital money being poured into the HOA market because of the breadth of opportunity that’s been further accelerated by COVID-19. Since residents have adopted a more remote culture, there’s less of a demand for living in a city close to work and more demand for living in a larger community or home where home is the office and HOA fees are more cost effective.
Property managers are watching the industry consolidate around them, with investment dollars pouring into the single-family rental sector, and the hot housing market motivating some small-portfolio investors and property managers to sell off their properties. However, this presents an opportunity for property managers to grow their own portfolios through acquisitions of smaller companies and investment portfolios.
With this widening of the property management sector, many smaller HOA management companies are being impact, selling, or consolidating through a variety of factors, including:
More Investors in the Property Management Sector
Many of properties have been acquired by investors, raising questions about the potential impacts on the rental market of consolidation in property ownership — for example, the transformation of naturally occurring affordable housing owned by mom-and-pop property managers into market-rate housing owned by investment firms. However, as we mentioned, small-portfolio investors continue to own the vast majority of small rental properties throughout the country.
As a result of the pandemic, ultimately, there are fewer people able to purchase houses at this time between the recession, the market and more. This has solidified the need for the HOA market even further — however since there will be fewer individual owners that only own a few houses because there is more risk residents will have difficulty paying. It will become even more of a monopolized market.
More Opportunities to Grow Through Acquisitions
Rather than adapting to the fast pace of change required of property managers and investors in the current market, some are selling off their portfolios. This creates opportunities for others to expand: 25% of property managers plan to grow via acquisitions of other companies’ or investors’ portfolios over the next two years.
Many older companies have left the market, offering properties for sale. They may also not be able to grow, so the alternative is to sell or consolidate.
Property managers worry about the impact that the regulatory burdens and financial struggles small-portfolio owners faced during the pandemic are here to stay.
More governmental regulations proposed and implemented have driven small-time property managers to hire professional management or sell. It has consolidated the market.
With the pandemic and new laws that impact property management, we feel our residents have leaned on us more for our expertise and staying up-to-date with the changing laws.
Increased or localized regulations will continue to be one of the most important property management trends in 2022 to stay ahead of.
A Continued Emphasis on Personalized Customer Relations
Property managers are going to spend more time shifting and prioritizing customer relations. HOA management specialists are expending far more energy toward their customer relationships than they did prior to the pandemic in response to increased demands from residents. On a property managers’ list of priorities and according to a recent industry poll, ‘attracting and retaining great residents’ rose from position #9 in 2019 to position #1 in 2021
More Time Spent on Communicating with Residents & Clients
The uncertainty of the last two years has led to a significant uptick in the time that property managers spend communicating with and devising solutions for their customers. In particular, property managers have played a key role during the pandemic as a mediator between residents and owners, helping to balance their interests in the face of complex financial and legal challenges.
More Requests from Residents Spending More Time at Home
Property managers have been fielding more incoming requests from residents as pandemic-related lifestyle shifts mean they’re spending more time at home, particularly due to the increase in remote work.
Residents are working from home more and demand more services, so many managers may be using more resources to run the property. They may also be receiving more delivery services and boxes to the buildings.
More Technology Doesn't Have to Mean Less Customer Service
Since so many of their customer interactions have been digitized, property managers feel that finding opportunities to provide memorable customer service is key to differentiating their businesses from the competition. Technologies like property management software enable property managers to cut down the amount of time that they spend on recurring processes so that they can devote more energy to the aspects of their job that technology will never replace: their customer service and industry expertise.
Empathy Will Drum Up Higher Customer Loyalty
More than ever before, management teams are all being called upon for new issues with more residents being home for greater periods of time. More leaks, more resident-to-resident issues and more projects being called for.
Empathy is a two-way street. Residents may have a greater understanding and appreciation of the daily challenges managers face in managing their properties.
No matter what sector you look at, the pandemic has created a greater need for empathy across the board – and this will continue to be one of the key property management trends to instill in your onboarding and training sessions with your management team.
Labor Shortages Will Require Out of the Box Solutions
One of the biggest pain points in 2021 has been a labor shortage of available vendors to handle maintenance work orders. Residents spending more time at home pushed the volume of maintenance requests higher and the pool of labor available stayed the same size, or in many areas shrunk.
This has caused an even larger delay in work order completion time and a greater hit to funds spent on maintenance since contractors are upping their rates in order to prioritize jobs. With fewer younger generations entering trade work, this trend will require some creative solutions in 2022 revolving around optimizing time and building out a stronger network of providers.
At FirstService Residential, we work to optimize time spent on HOA preventive maintenance in various ways, including:
Collecting all of your maintenance-related information.
Proactively assisting boards to optimize their budget to ensure the most effective vendor relations and utilization.
Establishing which common elements require ongoing maintenance.
Identifying specific maintenance activities.
Creating a master maintenance schedule.
Many businesses, individuals, and industries have been impacted by the labor shortage due to issues involving the pandemic and general, overall working conditions.
And it’s not just the United States that’s having difficulties due to the shortage. There are countries all over the world who are experiencing low numbers.
Digitization of the Property Management Industry Through PropTech
From the very start, the pandemic has required property managers to digitize interactions that they were used to conducting face-to-face with customers, staff and vendors – and this will continue to be one of the most critical and important property management trends in 2022. Even as shifting pandemic conditions have allowed some in-person interactions to return here and there, property managers are keeping the technologies in place that have led to greater efficiency for their teams, as well as greater convenience for their customers.
Property Management Technology Enables Greater Operational Efficiency
Property managers have discovered just how much more efficient their operations can be with the right technologies in place, without compromising the level of service they provide. In 2022, 30% of property managers say that leveraging technology to improve their efficiency will be a key component of their revenue growth strategy.
As an industry, we’ve learned how to be contactless and work remotely. We now know how to serve our clients in a more efficient way and leverage technology to a greater extent. And we are just scratching the surface.
Digital methods of payment, signing, communications, etc. are likely to see continued use to accommodate busy schedules for property managers and residents alike.
Widespread Technology Acceptance Among Property Managers' Customers
From a digital point of view, we have seen an increased ability and willingness for our residents to utilize more digital options that we have urging them to use for quite a while. And the software that we already have in place has been making great improvements to make all of this easier for everyone as well.
Residents have become increasingly amenable to technology as they see firsthand how much more convenient it makes processes like payments and communications. This is yet another one of the essential property management trends for your team to keep an eye on in 2022.
Customer-facing technologies like online payments, email and text communications, electronic rental applications and lease signing and online maintenance requests are now favored by property managers’ clients as well as residents of all ages. Property managers agree that these technologies are here to stay, even as some face-to-face interaction resumes.
Even when the pandemic is over, it’s highly likely property managers’ client base will not be willing to switch back to ‘normal.’ They will expect them to continue to provide the same online and convenient services, which should be accommodated.
PropTech Reduces Time Spent on Recurring Processes
PropTech has greatly reduced the amount of time and energy that property management teams need to devote to this area the application and financial processes in the industry. Electronic applications and resale are now widely considered the industry standard; and emerging technologies like virtual and self-service showings have risen in popularity.
Connect With Us To Receive Support
Whether it is a question, a problem, or a new business opportunity, you will want to partner with a company like FirstService Residential that has a proven history of support and knows best practices for your industry.
Our team has been managing HOAs, condominiums, high-rise buildings and more for years! Our experienced team can help you establish a plan of action when it comes to staying ahead of important property management trends.