Last modified on September 15th, 2021
By Brittany Benz
Attracting new owners has always been important for single-family rental property management businesses, however with global events and market trends driving big changes in the single-family rental space, it has now become a top priority. Yet, it’s not always easy for businesses to find space to effectively market themselves while still maintaining operations and providing great service.
In a recent webinar hosted by the National Association of Residential Property Managers (NARPM), Matthew Kaddatz, Sr. Director of Product at AppFolio and Lauren Suggett, Sr. Product Marketing Manager at AppFolio explored the emerging trends impacting the SFR market and took a deep dive into best practices property managers can implement at every stage of the owner relationship lifecycle, starting at the very first touchpoint. Below are a few of the key takeaways from their conversation:
Trends Impacting the Single-Family Rental Market
While the pandemic accelerated many trends across the real estate industry, single-family rental units experienced some of the most rapid changes. First and foremost, the attractive real estate market enabled owners to sell their properties at higher rates, which has contributed to more property management firms losing clients.
Additionally, due to the upswing in home sales, rental inventory is shrinking since most people who are buying homes are not looking to rent them. Single-family homes have also caught the attention of large investment firms, who are able to buy up properties quickly, further shrinking the market for smaller property management businesses.
Along with investments in property, there has also been widespread investment in proptech solutions, or software built specifically for real estate and property management professionals that enable actions like online rent payments, virtual showings, online work orders, and other self-service tools. These technologies have become more accessible and affordable than they were five years ago, and as a result we’re seeing many more property management professionals implement and depend on these solutions to run their businesses.
And we can’t forget how the shift to remote work on a national scale in 2020 influenced many people to move out of cities and into suburbs in search of single-family homes to rent or buy. Among this group are also millennials, who are shifting from apartments to single-family homes as they begin to have families. However, due to debts and rising housing costs many are not able to afford to purchase homes, so renting is their only option.
Emerging Opportunities for SFR Property Management Businesses
While some of the trends have made it more difficult for property management businesses to maintain growth, Matthew also shared some opportunities that are beginning to emerge. For starters, property management companies are well-suited to navigate the complicated forms of the CARES Act — which can provide cash relief to owners — so there’s an opportunity for them to use their skillset to position themselves to struggling owners.
Additionally, the end of the federal eviction moratorium means more owners will be searching for answers on how they can correctly and legally handle evictions. Which means property management businesses will have the opportunity to offer their expertise and assistance.
Lastly, some of the institutional investors mentioned previously don’t have in-house operations for their units, so property management businesses can fill the void by offering their services in some markets.
The SFR Owner Journey
After sharing some of the key trends and opportunities in the single-family rental game, Matthew and Lauren took a deep dive into the single-family owner journey. The customer journey plays a large role in how your owners perceive your business and your ability to attract and retain them as lifelong customers. In other words, the customer journey goes beyond the marketing funnel to include customer retention. Below are four key steps you need to take if you want to attract more owners effectively:
Step 1: Attract
The first step to getting more owners is to generate awareness, visibility, and demand for your services. Matthew stressed that it’s important to define your ideal customer profile or ICP. Where is your target customer? Why are you the right choice for this type of customer? By answering these questions you can better understand how you can reach them. It’s also equally important to establish your differentiators. In other words, what’s your “secret sauce” and how and where do you communicate that?
During the “attract” phase, marketing plays a big part in the customer journey, so you need to determine your marketing mix. Here are some marketing tactics you can implement to help your brand stand out from the crowd:
- Have a professional, easy-to-navigate website
- Utilize search engine optimization (SEO)
- Consider direct mail
- Create email drip campaigns
- Host phone campaigns
- Deploy targeted ads
- Ask customers to leave reviews on review sites
- Respond to both positive and negative reviews
- Add your brand to social sites like LinkedIn and Facebook
- Sponsor or host community events
- Participate in local community councils
Step 2: Acquire
After you’ve gotten a prospect’s attention, the next step is to acquire them as a customer. During this phase having a fast response time is key, so you’ll need to respond to inbound leads quickly. If you leave prospects waiting for days, they will lose interest.
After a prospect has reached out to your team, you’ll need to learn what their goals and pain points are. Let the prospect answer open-ended questions and be sure to listen during this step, as their responses can help you tailor your value proposition. Once you know their challenges and business goals, you need to establish your credibility and explain how your set of services and solutions solve their unique problems.
If a prospect doesn’t feel like they’re the right fit for your business, it’s okay to say no. In addition, it’s okay to push back on their expectations if they are unrealistic. The more honest and upfront you are now, the less likely you’ll run into issues down the road. As always, be sure to follow up and nurture those who didn’t sign up with you. Some ways you can re-engage lapsed leads are by sending a monthly newsletter or a personalized letter in the mail.
Step 3: Onboard
Now comes the fun part: onboarding. Your owner is fully invested in your company and is ready to hand over the keys to their property. During onboarding it’s critical to set your owners up for success with a thorough, customized onboarding process.
Take the time to walk through the technology you use by introducing them to your software and communication channels from day 1. If you have an online owner portal, show them how to access reports, ask questions, and review financials. During this phase you need to continue to set expectations and establish yourself as the expert and that you care about their property. To enhance the experience, consider sending a personalized welcome gift, along with an owner packet that has key details and everything they need to know about your business.
Step 4: Manage & Grow
Even after you’ve attracted, acquired, and brought a new owner on board, your job is not over. The best property management businesses strengthen and grow their relationships with their single-family rental owners on a continual basis. To avoid inconsistencies, you need to have a standard set of operating procedures to ensure you’re providing great service and that all owners are managed the same way.
You can put technology to work to do this. Automated workflows, mobile communication tools, and on-demand tools can boost efficiency and provide a better customer experience. For instance, with a digital property management system, Pam Gardner of Rollingwood Management can send monthly owner packets to all of her owners online:
“Sending monthly owner packets is all done online, so I avoid having to mail hard copies. I love the cash flow statement within AppFolio, which includes all of an owner’s properties. This keeps the owner from having to create a spreadsheet, and they can look at the profitability of all of their properties within one report.” — Pam Gardner, Controller, Rollingwood Management, Inc | 343 units
In addition to providing the kinds of technologies that make their lives easier, you can nurture owner relationships and show your appreciation by hosting events such as owner BBQs and happy hours regularly.
In this final phase, it’s a good idea to think about how you can grow and diversify revenue streams by investing in other property types, potentially bringing more maintenance in-house, or whatever works best for your business.
Reputation building is also key during this stage. The same reviews that attracted your recently onboarded owner will attract future owners, so consider reaching out and asking them to leave reviews on review sites and refer your business to others.
Lastly, you should never stop building your network. Keep your business top of mind and learn from others in the industry by attending investor clubs or groups and real estate conferences.
Acquiring new owners takes time and effort, but when it’s done correctly can lead to lifelong customers and the sustained growth of your property management business. By making the most of emerging trends in the SFR landscape and following the tips shared above, you can effectively acquire and retain more owners now and in the future. Register here to watch the full webinar recording.