Demand for rented properties is skyrocketing. In the US, the number of families and individuals renting homes grew from 9 million in 2005 to 43 million in 2015. There are almost 300,000 property management businesses in the US alone, with total revenues of $76 billion in 2019.
Until recently, the property management industry has lagged behind in its use of technology. This is starting to change, as competitive pressures rise and the sheer scale of managed properties requires new, efficient ways of doing business. Read on to learn how property industry is adopting new technology to improve efficiency, reduce costs, and make tenants happier.
In this article you will learn:
How Technology is Evolving in Property Management
Technology in Property Management - Challenges and Solutions
Technology Trends in Property Management
Automation and Digitization in Property Management
Leasing and selling properties involves numerous manual tasks. These can range from posting and responding to leads, handling showings, processing applications, to preparing the lease or sale. The introduction of improved technology can help automate many of these tasks. Ultimately, the implementation would allow real estate agents to focus on sales and personal service.
Some of these innovations include 3D virtual tours, automated tenant notifications, online applications, and automated background checks. In theory, potential tenants can schedule their tour of a new property using a mobile app, receive a temporary code to unlock the property, conduct their tour independently, and leave their comments in the app.
Technology in Property Management - Challenges and Solutions
The following are some of the common challenges property managers are solving with the help of new technology.
Challenge #1: Keeping records
Real estate and property management industries are legally obligated to keep records of all their transactions and property files. Keeping physical copies is cumbersome and difficult to maintain.
Solution: Moving to the cloud
Companies can host their transactions, lease contracts, and maintenance bill in the cloud, allowing for easy access to relevant information. An average property manager signs about twenty leases a month, and using digital signatures saves time and creates a digital receipt in virtual storage space. Online property management systems automatically save the contract in the property file, together with all other relevant property information. This could be seen as an additional step in backing up the data as well as the hard copies of contracts also on site.
Challenge #2: Managing payments for rent and utilities
The hassle of rent payment day is an ongoing challenge for property managers. Employees waste time accepting and depositing checks, while accepting cash creates the risk of human error. Businesses renting managed properties, such as shopping malls or office buildings, need a convenient way to pay their rent and utilities.
Solution: Online payments
Tenants who don’t want to automatically deduct rent and utilities from their bank accounts can use online payment methods. Such systems let users track payments and keep records, which can help settle disputes between landlords and tenants.
Challenge #3: Maintenance management
Maintenance is usually considered an expense that doesn’t add value. However, good maintenance directly relates to tenant satisfaction. Poor maintenance depreciates the value of the property and erodes trust. For commercial properties, lack of timely maintenance can severely hurt businesses build on visibility, such as retailers and restaurants.
Solution: Maintenance scheduling and tracking software
Cloud-based software solutions help companies schedule their maintenance services. Most solutions include an app that lets tenants create tickets. The tickets call attention to maintenance issues, and users can include a photo of the issue. Property management companies can integrate mobile apps into their property management software systems, allowing them to coordinate maintenance work orders and track technicians.
A property manager can use these systems to track work orders and make sure that employees complete their tasks on time. They can integrate these solutions with their property management software, and store payment receipts in the cloud.
Challenge #4: Screening tenants
Residential and commercial facilities might want to screen tenants before they rent out a property. This may include a background and credit check for commercial tenants and may involve ensuring that tenants have a license to operate.
Solution: Automated background checks
Modern property management software search government and commercial databases to alert property managers of red flags. Online applications also protect potential tenants by providing everyone with the same questionnaire, thus minimizing the possibility of discrimination.
Latest Technology Trends in Property Management
Artificial intelligence is everywhere, and the property management industry is no exception. Property managers use business intelligence solutions powered by AI to visualize their portfolios, measure performance, identify trends and make smarter decisions. Hotels, for example, are using machine learning software to anticipate market conditions, forecast occupancy, and offer personalized services to delight and surprise guests.
Property managers and real estate developers are using drones to get an aerial view of their projects and finished properties. Managers can use drones to inspect active properties from above, to isolate engineering and architecture issues, and to create attractive footage for marketing purposes.
International real estate companies are turning to blockchain technology to avoid bank transfer costs and help them make faster payments. They are using blockchain technology to transfer assets without requiring a central authority to verify the transaction. Since any transaction is recorded permanently and publicly on the ledger, transfers are transparent, accurate, and secure.
Property Management is Becoming a Digital Commodity
New technology is not only making property management easier and more efficient. It’s transforming the nature of the industry. In the past, being a property manager involved being on the property 24/7, directly managing staff and contractors, and personally receiving payments and complaints. Today, mobile apps and information services make it possible to keep in close contact with tenants, while automatically schedule cleaning, maintenance, and other tasks using a digital interface.
The next generation of property managers will be able to manage a larger portfolio of properties from a centralized office, or even from their living room couch. Will this shift provide better service for tenants and new opportunities for property managers in the same way that ride-hailing apps did for the taxi industry? Or will it create an impersonal, digital wall between tenants and landlords, like the digital presence of today’s banks? The true impact on the lives of residential and commercial tenants remains to be seen.