COVID-19 has forced nearly every industry in real estate to make some short-term and long-term adaptations in their management practices. Apartment owners, in particular, are adopting new practices to help keep tenants safe, reduce vacancies, and remain flexible in tenant attrition as they find out how to manage rentals in the "new normal."
A recent study conducted by AppFolio (NASDAQ: APPF), a property management software company, surveyed 1,000 property owners and managers to find out what short-term and long-term changes they are making to stay afloat while keeping safety and social distancing practices at the forefront of their business models moving forward.
Remote management and increased use of cloud-based software
One of the largest shifts the multifamily market is seeing is increased use of cloud-based software and remote work, with nearly 81% of respondents stating they had some staff working from home. While many larger or professionally managed apartment complexes were already utilizing some type of property management software, 46% have adopted some sort of new technology to help them with other key business tasks.
This move to a more digital management system with part-time remote work will likely stay around. Certain tasks like collecting rent, coordinating and monitoring repairs, and maintaining leases and move-outs still present a challenge for many property owners, and businesses are working to find more efficient and safe virtual solutions.
Virtual showings and leasing
With social distancing guidelines and restrictions in place, a large change in multifamily real estate has been shifting to virtual showings and leasing, where 71% of property managers said offering and utilizing digital showings is a priority. Virtual showings limit the number of people in the unit and reduce in-person interactions, although this method still requires someone to show the unit.
When combined with 3D virtual tours, tenants can see the unit accurately without having to physically be there. With digital leasing services, there are now ways to renew leases or complete a new lease without any face-to-face interaction. Forty-three percent of respondents said they are focusing efforts on offering digital leasing services on a permanent basis moving forward.
Communicating through email and text
While twenty-first-century methods of communication such as text and email have been a common practice for property management prior to COVID-19, it will likely become a permanent and the primary communication method moving forward. Eighty-seven percent of respondents say bulk email and text will be a long-term modification to their management models.
A large focus for property managers and owners is retaining tenants. With the challenges of leasing, especially for those who don't have virtual services in place to handle tenant turnover and showing vacant units, keeping the current tenants in place is a top priority.
A large part of managing an apartment complex right now is shifting the focus for the business to minimizing expenses to improve the bottom line. While most property managers and owners have a positive outlook on the market, reducing expenses provides a safety net in the event of increased vacancies or fluctuations in the marketplace. Stabilizing occupancy and improving virtual systems will help keep the operations moving as intended.
Property management is undoubtedly facing challenges, but these are obstacles that are easy to overcome and that, in the long run, will likely improve the overall efficiency of management practices. Being successful in the current market is possible, but property owners and managers have to be willing to embrace changes, adopting new policies and technologies for the short and long term.