What to expect from 2023? Proper predicts sustainability, flex-leases, single-family rentals, a strong tech presence, and a laugh or two.
As tech-enabled property accounting experts, we help property managers streamline and scale operations. In that spirit, our accounting brain trust did some prognosticating about the year ahead.
Spoiler: A lot is coming in 2023, but don’t freak out— we boiled it down to 10 points:
1. Renter Migration
In past markets, renters scrambled for places near work. Today, low-tax states, and work-from-home, changed that. Renters want room, amenities, and high-speed Internet to work and live in the same space.
Additional demand for sustainability means reducing carbon footprints and energy costs. Appeal to this market and save money with green initiatives, energy-efficient appliances, low-flow plumbing, and eco-friendly cleaning.
2. Diverse Tenants
Boomers don’t want the hassle of home maintenance, while more Millennials enter the market as renters, meaning shifts in housing services. Older residents want accessibility and conveniences like elevators, ramps, bathroom safety rails, and ADA compliance, while renters who work from home and have growing families want:
- Extra room or flex space: Small private spaces from larger rooms or dead space off a hallway.
- Outdoor space: Not necessarily a large yard. Outdoor spaces can be a simple patio or small garden.
- Public and private space: Homes may have larger kitchens or living rooms with adjacent food prep spaces or book nooks.
The COVID-19 pandemic increased demand for flexible lease options. Property managers can improve tenant retention and appeal to demand with short-term or month-to-month leases or even options to rent workspaces.
3. Single-Family Rentals and Suburbs
PWC and Buildium’s report shows continued popularity of single-family rentals, with 68% of respondents living in suburban or rural areas, a whopping 10% increase over the last five years.
What’s attracting these renters?
- Safe, quiet, family-friendly neighborhoods
- Indoor/outdoor space for children, pets, or extended family
- Kid-friendly homes with air conditioning, laundry, and dishwasher
Single-family property managers can attract residents with these amenities.
4. Supply and Demand Challenges
Housing construction will increase as the economy reopens (with more detached homes and apartment rentals), but inventory will remain tight. Home prices may level off while sales slide as rentals increase.
High-income renters can pay more but want better services and amenities. Landlords and property managers can negotiate higher rents in exchange for improved amenities. Rent is rising everywhere, so brush up on your negotiation skills and know the market.
These days, prospects turn to the internet for rentals, so property managers need a robust online presence, professional website, active social media, and advertising platforms like Google AdWords.
Need insights on digital marketing strategies for property managers, like tips on targeting, building an audience, and measuring success? We’ve got you.
6. Data and Technology
Data offers insights into tenants, trends, pricing, and marketing. Solutions like AppFolio and Yardi automate rent, maintenance, and accounting to turn data into user-friendly dashboards, graphics, and reports. With those metrics, informed decision-making is easy.
Technology lets you:
- Save time
- Take on more doors
- Attract high-quality, long-term clients and tenants
- Ditch physical offices
- Reduce costs
- Increase organization, efficiency, and consistency
- Improve job satisfaction
The caveat: technology without expertise handicaps rather than helps. Optimize your tech’s accounting functionality with the right accounting skills.
7. Owners as Investment Partners
Owners need more than maintenance, rent, and turnover help from property managers. To grow their door count, successful property managers become partners in owner investment strategy.
Many property managers advise clients on portfolio expansion or value-add upgrades and services. As experts in the local market, some investors rely on property managers to find investment properties.
8. Growth and Competition
The rental market might grow as real estate and labor markets cool. As things ramp up, competition inflation and rising costs will affect profitability.
Technology keeps property managers competitive and profitable during labor shortages. Since inflation shows no sign of stopping, they’ll find new ways to protect the bottom line, so reconsider and renegotiate vendor costs, overhead, and contracts.
9. Staffing Shortages
Attracting skilled property management staff is tricky in the best of times and near-impossible when the economy has more jobs than workers. While property management can pay well, and technology eases the workload, the need for good workers persists.
Automate whatever tasks you can, and let cloud-based technology help.
10. Outsourced Accounting
Property management accounting requires bookkeeping know-how and tech-savvy. That expertise necessary to grow your door count can be tricky to find, but the ROI (peace of mind and 30%-50% savings over in-house accounting) is worth it.
Proper constantly (yes, even at this very moment) scours the globe to train elite property management accounting and tech experts. We’ll close out your books and improve processes for the years ahead. Call for a free mini-audit or to discuss “Proper” preparation for 2023.