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Property management is never easy and often a mercurial beast. However, there are some challenges that remain the same: struggles with operational efficiencies, preventative maintenance, growth through new builds and acquisitions, managing vendor partnerships, staff, profitability, and budgets.

It’s easy to lose sight of the ultimate clients, the resident and the owner, in the barrage of daily operations. However, property management trends are shifting in 2019 and it’s important to not lose sight of these changes so we can fulfill our customer’s needs!

Here are the top five trends I’ve noticed in my research for 2019:

1.) Seniors are a growing market and renting much later in life than in previous generations. According to the Joint Center for Housing Studies at Harvard University, “More than half of the nation’s households are now headed by someone at least 50 years of age. These 65 million older households are highly diverse and require different types of housing to meet their needs and preferences. Affordable, accessible housing located in age-friendly communities and linked to health supports is particularly in short supply”.*

Affordable housing is in such short supply in some markets that it’s creating a crisis, including homelessness and seniors essentially couch surfing in their relatives’ homes. Seniors additionally need easy access to public transportation, health care, and work, as many are now working well past traditional retirement age. Smart investors are looking at ways to address these issues in a holistic manner that serve this growing market and bottom line.

2.) Buying vs. Renting: 2019 looks to be a good year for renting vs. buying. The average rate for a 30-year fixed rate mortgage is currently 4.82%, with actual offered rates ranging from 3.63% to 7.84%.* This is still a low rate and by buying, the owner gains equity and tax breaks while house prices are on a slight decline. The economy is healthy and unemployment is 3.9%- so why aren’t more people buying?

While seniors who own homes are considering selling to downsize, many millennials are skeptical about taking on the burden of home buying. Why? High student loans, a long- term financial commitment without a partner, tight loan qualifications, and the appeal of urban living with many conveniences.

Bottom line, if a millennial can make it work, they’ll buy, but often a condominium in a trendy neighborhood. More often, renting is easier and provides the lifestyle they’re looking for while burning off their student debt.

3.) Lenders are offering low interest loans for capital investments to improve energy efficiency. For example, Fannie Mae has a program called Green Rewards for qualified property owners to improve their properties with projects such as water efficiency (submetering, low flow devices), HVAC upgrades, envelope improvements such as new windows, etc. Now is a great time to look into the advantages of improving your asset’s efficiency. *

Many upgrades will result in lowering energy costs to cover loans and help to increase cash flow. Greener apartments also attract renters looking for lower utility bills. This 2019 trend should certainly be taken into consideration when assessing your less efficient properties.

4.) Big data: Big data is BIG! Simply put, big data is a large amount of data that’s analyzed via algorithms to make predictions. For example, big data looks for patterns of when and how often renters visit your website, as well as what they’re looking at on a particular page. In a nutshell, data helps us to see what interests these renters and analyze how their behavior may predict when they’ll rent. Many companies are now offering products designed to predict traffic, help you determine rents, rent specials, slow and fast traffic seasons, etc. Carefully vetted and thoughtfully applied, these products can be helpful in creating efficiencies in operations as well as increasing occupancy and rents.

5.) One of the biggest operational challenges for 2019 will be finding and retaining on-site property management talent. According to recent reports from Freddie Mac, average rent growth is projected to modest in 2019 and property managers will need to find innovative ways to maximize NOI, both in driving revenue and controlling expenses.* Take your time to vet your new hires, get the best, and pay them well.

2019 is already proving to be a thought-provoking and challenging year. I’d be interested in what you think of these trends, how these are showing up in your portfolio, and what you’re focusing on most this year. Please be sure to let me know what’s on your mind for 2019!


Kate Forsyth serves as the National Sales Executive for WaterWatch Corporation, where she is responsible for shaping and implementing the WaterWatch sales agenda across all company platforms.                        

Feel free to reach out to Kate via email at kforsyth@WaterWatchCorp.com and by phone at 585-448-2420.

 

 

 

Sources:

* http://www.jchs.harvard.edu/housing-americas-older-adults-2018

* https://www.valuepenguin.com/mortgages/average-mortgage-rates

* https://www.fanniemae.com/content/fact_sheet/greenrewards.pdf

* http://www.freddiemac.com/research/forecast/20180817_multifamily_midyear_2018_outlook.html 

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