Maybe you’ve heard the quote, “The key to success is often the ability to adapt.” As VP of Product Management here at AppFolio, I track the major industry trends that affect the property management business. Below I’ve outlined some “mega trends” that I see evolving in the next 5 to 10 years.
Trend #1: The Changing Dynamic of the Renter
Statistics show more and more people are using the Internet in every demographic. As of June, approximately 70% of the U.S. population is using the Internet regularly which is almost 240 million people (http://www.internetworldstats.com/am/us.htm). Ten years ago, property managers would advertise a property for rent in the Newspaper. Today, renters (especially younger renters) rarely read the classified section of the newspaper and instead expect easy access to online listings whether on their computer or mobile phone. They want to browse vacancies that match their needs, see pictures and watch virtual tours. Increasingly this is happening from dedicated rental listing sites or simply listing services like Craigslist.
Generation Y is accustomed to interacting in a different way than past generations: they prefer text or email to the phone call, online rental forms to filing something out by hand and driving it in, automatic online payments to dropping off the rent check, and a management company that is responsive and listening to their needs.
This shift in renter behavior is pushing property management companies to adopt and update their technology. I advise property managers to build a modern website and be visible online. If old methods of finding applicants are becoming less and less effective, try new areas where your renters are likely to be. With potential renters and property owners on social media sites like Facebook and LinkedIn, it makes sense for you to meet your market on the platform of their choice.
Trend #2: People Visit Trusted Social Networks for Reviews
As a property manager, you are marketing your business to both owners and renters and almost everyone has access to comments from past residents and clients on social networking sites. People are reading reviews before buying a book on Amazon, checking Yelp before booking a restaurant for dinner, and the same is true for the property rental business. When looking for a new home, people may first ask their Facebook friends or other online networks for a good recommendation. Statistics show Facebook has over 250 million users and the numbers continue to grow. Understanding this shift in behavior is key to adapting your business for future success.
When it comes to online reviews and forums, I see more and more businesses joining the conversation so that they can respond to customer feedback in real time. A good way to turn an angry gripe into a positive sentiment is to address people head on. Letting someone know that you hear their frustration and want to take action to correct the situation, makes you seem like a person people will do business with.
Management of your reputation is crucial to running a successful business, and property managers must differentiate themselves with excellent customer service in order to stay competitive.
Trend #3: Mass Marketing No Longer Works
The days of sending out mass messages to a broad range of people is over. Mainstream media outlets are saturated with information and it appears that direct marketing to your target audience is critical to increasing revenue. Companies today are doing some research into renter and owner behavior and creating customized marketing campaigns. If you know your audience, market specifically to them for a higher ROI.
Adapting to Change is Key to Future Success
Don’t forget to take larger market trends into account as well. For instance, we notice that the “green movement” is gaining widespread popularity. Property management companies can take advantage of this public interest by making a few upgrades to their properties and marketing them as “green.”
What changes will you be making to your business plan in the next 5-10 years?