COVID took everyone by surprise, causing industries to shutter regardless of how solidified they thought their position. Except for the technology sector, businesses everywhere were forced to rethink their models.
The property management industry was no exception. Typically, these companies could be very hands-on, but with stay-at-home orders and limited contact, they are forced to shift to a more virtual model. The question is whether rental management companies can adapt to the rapidly changing business sector and what it will take to do so.
The Impact of COVID On Property Management Business
The quarantine changed the way the rental property management industry operates. Planners have already started considering adapting plans to make the work from home model more efficient and accessible.
However, despite the many negative consequences of COVID, there are a few silver linings to the dark cloud. For one, the National Multifamily Housing Council reported that 80% of families paid all or part of their rent. Other surveys show that employers responded to the need for employees to work from home and remain flexible in the pandemic’s wake.
Adapting To the Post-COVID Business Environment
Landlords won’t see the full effect of the pandemic for some time. Thankfully, technological solutions have helped ease the tensions of the pandemic, and they will continue to help ease that transition as more data emerges and as we continue to recover.
A report by KPMG showed that landlords can respond to the pandemic in three different ways to ensure they don’t succumb to the negative effects of the pandemic.
- Improvised Access to Residents- Property managers need to be able to stay in contact with their residents, despite the challenges COVID poses.
- Implement New Measures- Business methods need to adapt as the pandemic takes shape. Even after the pandemic recedes and we resume a somewhat normal life, these measures will remain apart of our society.
- Adapt Business Strategies- to succeed in the post COVID-19 business arena, companies must formulate new digital initiatives to respond to needs.
Companies that use a combination of all three of these strategies will be the most equipped to succeed in the changing business environment.
The Changes To the Property Management Business
The most significant change in the property management industry has been the shift from in-person business activities to remote business affairs. Because of this shift, landlords have been forced to adapt to these changes in the following innovative ways.
One of the most distinct property management industry changes has been switching from in-person tours to virtual tours. The cloud-based environment has also made it more possible for businesses to archive paperwork such as lease documents and rental applications.
Here are some other tasks the cloud-based environment makes possible:
- Virtual walkthroughs
- Property management apps to collect apps, accept maintenance requests and communicate with residents
- Virtual property inspections
- Lockboxes that allow tenants access to properties without landlords being present.
The cloud-based environment was already replacing many in-person tasks. The pandemic simply expedited matters.
Private Communication With Tenants
Landlords must care about more than the digital tools they use to sign leases. Being a successful landlord comes down to communicating frequently with tenants and responding to problems quickly. Using manager apps helps tenants and landlords respond to arising problems.
Landlords can provide communication on matters such as rent payment issues, maintenance requests, and lease questions. Doing so makes sure property management companies can apprise their tenants of all of the important situations that their building or home faces.
It provides a level of assurance that the tenants’ property managers care about their needs and are willing to provide excellent service to ensure their comfort. Another way property managers can stay in touch with their residents is by sending weekly newsletters telling of any important events or details.
Rental Property Maintenance
During the pandemic, rental property management companies had to rethink the way they approached maintenance issues. Social distancing mandates meant that tenants needed to limit in-person interactions.
Rental property managers got innovative during the pandemic by instituting step-by-step tutorials or dropping off equipment to the tenants’ homes. In the future, video calling can reduce the time spent responding to maintenance requests and free property management companies to devote more resources to higher priority fixes.
Temporary Halt in Evictions
The pandemic put a moratorium on evictions, which could have significant impacts down the road. Maryland had the 10th highest eviction rate in the country at 3.6%. After the pandemic hit, that number lessened, but that doesn’t mean those who lost their jobs had their rents forgiven. It just means they couldn’t be evicted.
The verdict is still out on whether these renters will ever be able to recover their rent, or whether they will simply get evicted after the moratorium lifts.
Increase In Rental Delinquent Rates
Some states’ rental delinquency rates have almost tripled since the pandemic. This is a concerning statistic considering that while stimulus checks have helped average citizens keep their heads above water, rental property management companies haven’t received much government aid.
If these delinquent rates continue, and companies are left to foot the bill, we could wind up with a disaster on our hands.
Conclusion- How COVID Affected Rental Property Management Companies
The pandemic produced both good and bad aspects for the rental property management industry.
On the one hand, rental property management companies have adapted their business models to incorporate more technologies that will continue the transition from in-person activities, to virtual activities. On the other hand, rental property management companies were somewhat left to fend for themselves in the midst of a tumultuous economic environment.
COVID will by no means ruin the rental property management industry. With the vacation rental industry steadily growing, and heavy vaccine administration, it’s not a question of if the property management industry will recover, but. The only question that remains is how the industry will look when it incorporates the new technology into its fabric.