As someone who spends their life mildly obsessed with the real estate industry, I have been closely watching the rental market’s behavior over the past 5 years. Consumer behavior and their demands represent a force for change. This change has brought commerce closer to their doorstep, especially through the pandemic.
Does this behavior really matter to the rental market?
Does it change how we operate a property or portfolio?
Does it change who we partner with to help us serve various needs?
I believe the answer is a resounding "yes," but I’d like to dig into why.
THE POWER OF THE “CONSUMER RENTER”
With more people opting to work remotely, they are now searching for rental properties that meet their new needs. This shift has changed everything about how we look at running rental portfolios, who we partner with to help us manage, and how we communicate with renters. It has even changed how we communicate the noun "renter." If the word "consumer" doesn't come up in the same conversation, it's clear that people don't understand who property managers are really working for.
Gone are the days where landlords and property managers could mishandle consumers, and there are many reasons for this. First, the Internet has given renters the ability to compare prices and look for better deals. Secondly, the pandemic has caused a significant shift towards remote working, which has given renters more freedom to choose their location and be more selective about what they want.
It has changed how service groups and retailers engage the consumer. When consumers started leaving their homes less often, retailers and the supply chain had to figure it out faster than ever. According to a survey done by McKinsey in April 2021, 30–40% of consumers in more than one country have been using e-commerce and mobile delivery at an increased rate. In 2020, Adobe Digital said that e-commerce had grown by 40% and that online orders had grown by 124%. These are massive shifts in behavior.
ADAPTING TO A NEW ERA
With renters having so much power at their fingertips, landlords and property managers must adapt to this new reality. They need to pay close attention to the wants and needs of renters and be more responsive to their requests. They must also be proactive in their communication and strive to maintain positive relationships with their tenants.
It’s important we pay attention to the statistics beyond just the rental market. Certainly, recent studies show that 83% of renters are searching for properties online. And, 57% of them say that they will choose to rent from a landlord who provides them with an online portal for rent payments and maintenance requests. In almost every other category, however, these are commodities that have been well commoditized by digital platforms such as Leasera.
THE ROLE OF TECHNOLOGY
Property managers with great properties, who accept payments online, and who answer requests quickly are becoming the norm. To compete today, managers will need a lot more. Some have started to provide consumers with access to financial success tools. Through their renters' portal, others let their customers buy groceries at a discount from their favorite stores and stores near where they live. Smart property managers are starting to beat out every other property in their area by creating communities that are local, unique, and loyal.
Think it doesn’t matter enough? Statista data revealed that this shift in consumer behavior took the global food delivery market, previously valued at $107.4 billion in 2019, to a projected reach of $154.3 billion this year (2023). Just think of what it will do for the digital commerce around our properties.
Consumer behavior could lead to huge improvements in how property portfolios are run, how they are serviced, and how the consumer experiences them. Let’s unpack this opportunity.
Based upon the 50/30/20 rule of household spending, 30% of most people’s income goes toward discretionary spending on things like entertainment, food, clothing, travel, and hobbies. Let’s just say that, by way of convenience and location, rental portals find they can attract just 10% of a consumer’s total discretionary spending.
In other words, 3% of their total monthly income or more could within reason be spent within the renter’s portal, right where they pay their rent and insurance, instead of being spent at the Amazon, PetsMart, or DoorDash app/website. If you simply take the average renter’s income from even 2019, which was estimated at $41,571 per year, this means you’re increasing spending “within” the portfolio by roughly $104 per month per rental household across America.
THE BIG OPPORTUNITY IN PROPERTY MANAGEMENT
$104 attributed to every rental household every single month. That — Is — Massive. When valued correctly, it means that property managers have more ways to make money, that service professionals have an easier time, and that consumers pay less.
As a leader in the digital consumer and rental platform space, I think landlords and property managers who embrace these changes will do well in this new era of the rental market. They will forever change how we use the digital tools that allow us to have these valuable interactions and attract high-quality tenants who value openness, collaboration, and convenience a lot.
The rental market has changed, and landlords and property managers must adapt. By using technology and paying more attention to what renters want, they can build long-lasting relationships and build a successful portfolio that is good for everyone.
This is a new era of opportunities, no longer managed by property management software. This is REM.
LEASERA offers the worlds only full service property management software solution, also equipped with our services marketplace, flexible leasing and resident loyalty and lifestyle solutions. Together, this platform is offered free to property managers, service professionals and renters alike.
Leasera's combination of features and functions is the only rental ecosystem management software ("REM") solution on the market right now. Our management software platform includes a full property software platform, a rental marketplace for on-demand rentals, and a customer loyalty and lifestyle system. For our property management clients and their customer communities, we connect connected travel accommodations with direct-to-door services like dog walking, food delivery, and ride sharing.
REM provides fast moving property owners and a dynamic renter demographic with the benefits and options needed today. By serving our property management companies, and property investment groups, as well as our partnerships with hotels, travel rentals, investment groups, and more, LEASERA has ushered the rental ecosystem into a new era.
LEASERA offers our PMC clients added value across their long-term rental portfolios with consumer-loyalty, an intelligent leasing-as-a-service platform, and an integrated marketplace of supportive tools and service providers. Consumers gain rewards, empowerment, and flexibility. LEASERA is a portfolio company of Second Century Ventures, was named Plug and Play’s top 50 Proptech Innovations, CREtech’s Hot List as one of the “Top Companies to Discover in Real Estate” and as a “Leading tech site to discover” and has been dubbed years ahead of the market by industry investors, professionals, and insiders.
Welcome to a new life on leasing.
