What's Ahead in 2023 for Rental and Property Management
What can we expect in 2023 in the rental and property management industry? Judging from the current industry and economic climate, here are the trends emerging in the rental and property management industry in 2023.
1. A profitable year for landlords and property managers
In 2023, we’ll continue to see a healthy and thriving rental and property management industry. The rosy outlook is driven by the ongoing housing market crunch and affordability crisis with some markets having more demand than supply. As buying a home becomes even more impractical and unattainable, renting offers a solution, as always.
We could see growth in the rental and property management space in the next 5 years. Aside from the influence of housing market trends, this prediction is supported by the growth of property management technologies. Property managers can further develop their business with the help of these technologies, especially if they have the right business model and strategy to ensure continued profitability.
2. More widespread use of high technology
As mentioned above, modern and innovative software and hardware availability will make property management a lot easier for landlords and managers. As such, the demand for proptech tools will increase. As we continue to embrace remote work in all industries, including rental, property management software and IoT devices will take center stage.
Furthermore, landlords and managers will be encouraged to provide tenants with infrastructure and amenities designed to improve security and service. Marketing will also involve new tech, such as augmented reality (AR) and 3D modeling, making virtual viewings even more exciting and interactive. We also see more managers and owners investing in their own website, intranet, or app to boost tenant communication and engagement. Finally, online payments will be the norm.
3. SaaS to take over the software arena
Automation will play a huge part in property management in 2023. Managers will look for property management software that’s easy to adopt and offers comprehensive functionalities. Cloud-based SaaS solutions deliver these capabilities. Managers should be on the lookout for software that supports tenant screening and management, payments and accounting, virtual leasing management, property maintenance scheduling, repair service booking, and other crucial functions.
4. Greater demand for property management services
It’s not just technology that will be in high demand this year. For busy property owners who can’t keep up with the industry trends and tenant expectations, it makes sense to outsource property management. Rental owners can leverage the expertise of tenured property managers to reduce stress, especially amid economic uncertainty. Property managers ensure that best practices are adopted to maintain efficiency and profitability. Considering these, it’s not surprising that the demand for property managers is still higher now compared with pre-pandemic levels.
5. Property management portfolio growth
With high demand for rentals and property management further empowered by modern technology and efficient property management services, owners are bound to expand their portfolios. Since investors are more inclined to take risks in buying properties during an unstable economy, they are highly likely to purchase real estate properties and turn them into rentals. It’s also good to note that property management portfolio growth is telling of the return to pre-pandemic business levels.
6. Efficiency continues to be a challenge
For the most part, the future looks sweet for the rental and property management industry, but it will not be without challenges. The job crisis and increasing cost of living will also affect property owners. Evictions could increase as some tenants deal with income loss. Some tenants may leave to find cheaper rentals. The rise of remote work can also encourage tenants to move to cheaper cities since they no longer need to live close to work. Furthermore, it may be a challenge to find qualified property management staff amid the job crisis. These challenges combined can affect efficiency and profitability.
7. Rental rates might continue to rise
The global increases in commodity prices, wages, interest rates, service charges, taxes, and insurance premiums may eventually push landlords who haven’t increased rental prices to do so this year. They may also increase prices to provide better services to tenants.
8. More landlords will require renter’s insurance
Tenants can skip getting renter’s insurance unless their landlord requires so – but in 2023 we’ll see more owners requiring it. Given today’s economic and financial uncertainties, renter’s insurance can help minimize liabilities that would otherwise cause a rift between landlord and tenant, such as damage or loss of property.
9. Tenant experience as a priority
High demand for rentals means there are many players in the market. Property managers will strive to improve advertising and marketing to attract qualified tenants. Efficient tenant screening and onboarding will also be prioritized. Overall, owners and managers will focus on creating an enjoyable tenant experience throughout. The provision of property management tools will be instrumental in achieving this.
David Bitton is the CMO and Co-Founder of DoorLoop, a property management software company serving the real estate proptech industry. He is a member of the Forbes Technology Council.
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