The Future of the Property Management Industry: Tech Trends for 2022

In recent years, the property management industry, once slow to adapt to new changes, has made a notable leap forward. From smart locks and self-showings to blockchain transactions and real-time updates between landlords and virtual assistants—new property management technologies shape the industry and change the way property managers handle their day-to-day operations, making the real estate industry more organized and efficient.

Yesterday, machine learning and artificial intelligence seemed to be far-off ideas for property managers, but today these are must-haves that need to be taken into account when it comes to societal digitalization in a global pandemic.

The year 2020 has been a difficult test for everyone, and the property management industry is no exception. The COVID pandemic has undoubtedly thrown the market out of whack, forcing property managers and owners to 'reinvent the wheel' in terms of how they handle business. Here are some of the main pre-pandemic property management industry statistics:

• More than 847,000 people employed
  
• Over 282,000 property management companies (in the US only)
  
• About $88 billion in revenue generated per annum
  
• 16% of US GDP
  
  

Between 2015 and 2020, the apartment rental market in the US demonstrated a steady 1.7% growth, which reached $173.4 billion in 2020. However, the COVID pandemic has caused rental demand to plummet by 4.5% in 2020. This has, in turn, resulted in:

The rental market has experienced a considerable shift as property managers look for new opportunities in other market segments during the pandemic. To understand this change in demand, take a look at New York, for example. There, the number of rental listings experienced a skyrocketing 166% increase in 2020, which is also believed to be the highest spike in the last fourteen years. Other large cities in the US are not that far behind New York and see similar patterns.

With such an oversaturated urban market where offerings exceed the demand, it is no wonder that property managers and agents are starting to move outward. Now, suburbs and small towns are the main areas of focus. Considering that single-family rental units were on the rise in the past few years, moving the market outside of big cities and their constantly growing monthly rents seems to be quite obvious.

For tenants, this means lower rental rates, and agents start to see new prospective markets. On the other hand, the economy benefits from infrastructure investments and new jobs across states.

Once it became clear that there would be no fast ride through a global crisis, governments all around the world stepped in to provide specific measures to lessen the pressure on tenants.

In the US, most of the steps were taken at the state and local levels. According to JLL research, 34 out of 50 states prohibited any evictions during the pandemic. Many mortgage payments were put on hold, and lots of large construction projects were temporarily frozen (except essential ones, like medical facilities).

The government has also recommended reducing the number of viewings and carrying them out with some sort of pre-screening process, where possible. This took the major share of the rental market online, and many viewings are now held virtually. Video tours, 360 virtual tours, and professional photoshoots are now helping managers and landlords to reduce physical and social contact.

All these measures have helped keep the rental market from experiencing a complete shutdown, but the long-term impact of the pandemic is still yet to be discovered. For one, as the market recovers and society gets back to its normal life, apartment rental demands will start to increase slowly yet again.

On the contrary, however, tightening of market regulations will result in an inevitable rise of rental prices in big cities, making housing in urban areas more expensive than ever.

In 2022 the government will need to ensure that the emergency measures taken in 2021 don't become new bottlenecks for the apartment rental industry.

In the pre-pandemic period, construction projects in big cities were backed up with high property costs and growing rental prices. At the same time, low-rent apartment offerings for low- and middle-income groups of renters were at a minimum.

With the market shrinkage and change in tenant preferences, more and more construction developers are forced to move out of the big cities to places where construction is only starting to gain momentum.

Another reason for the change in these market priorities is the fear (due to COVID-19) of densely populated condominiums, which makes renters reside in remote locations or even mobile homes. In this regard, 2022 is also likely to be a year for increases in single-family detached housing projects.

Despite the fact that Millennials define today's tenant market, a major shift towards Generation Z in the tenant base is definitely on its way. Gen Z enters the workforce in a world of technology and a strong economy. They are more educated, tech-savvy, and underemployed, which means that the standard rules of the real estate market will not work for them anymore.

Such renters will more likely be attracted by free Wi-Fi, smart home technologies, and charging stations for electric vehicles, rather than BBQ grills or downtown proximity. This is something that should be taken into account by property managers.

On the other hand, seeing older generations like Baby Boomers or Millennials going through various financial struggles makes Gen Zers more conservative and financially savvy. According to Realestateexpress, 97% of Generation Z plan to buy a home in the future. For property managers, this means that, in the coming years, tenants will opt for more affordable (yet functional) homes that will allow them to maximize their savings for the future.

In 2020, COVID-19 served as a catalyst for many companies to upgrade their tech stacks and order software development for startups. As remote communications became a priority worldwide, rental agents started to look for ways to maximize the effectiveness of online interactions with their prospective clients. Automated messaging tools and video calls all work together towards a single goal.

This doesn't only apply to property managers and potential clients or tenants. Property management software allows managers to schedule laundry services, assign cleaning and disinfecting procedures, and much more.

Intelligent buildings, in turn, are no longer perceived as something fancy. Keyless entry systems and online card payments take in-person meetings out of the equation, while the ability to regulate heat, temperature, and moisture in the house is becoming a part of good hygiene habits (especially amongst the Gen Zers).

In the near future of property management, both segmentation and specialization will play a significant role.

As for industry segmentation, 2020 has shown that those who offer a property in a particular segment have more secure positions in the market than those dealing with everything from low-rent apartments to luxury mansions.

While segmentation helps managers set themselves apart from the competition, specialization brands them as reliable rental professionals. With property management activities starting to involve more technologies, skills, and regulations to be aware of, it becomes evident that prospective renters will look for certified professionals in the market in the first place.

The real estate industry has traditionally been a bit slower in the adoption of new tech trends in property management. The best solution would be to hire professionals, so here are some tips on how to manage offshore software development teams effectively. However, booming property management technologies and new property management trends are taking center stage in the market today.

The cloud makes us mobile and lets us keep our work activities at our fingertips. Cloud-based software and services eliminate the need to be physically present near a server to get information about tenants, including their contact information, moving dates, unpaid rents, etc. Now, all information is available on the go.

Not only does cloud computing make property managers' lives easier, but it also reduces operational costs and speeds up decision-making.

At first glance, it might seem that smart home technology is a luxury, especially if we are talking about the rental industry, where the goal is always to make a profit from the property you own or manage. But this is simply not true. Smart homes are beneficial for renters as well as landlords for various reasons.

For renters:

Big data can give property managers a broader view of the market. Managers can offer them more relevant properties if they are equipped with better knowledge of their tenants' past activities and preferences. Rental managers can source tenant data from websites, property management systems, or CRMs.

What's more, big data helps managers and landlords better understand what's going on with their facilities regarding energy, water, and electricity consumption. Being able to constantly track all utilities in real-time keeps managers aware of their business in general and helps promptly address unusual situations.

Virtual reality and augmented reality both play a part in the industry. Many managers are now offering 360-virtual tours for their rental properties. Some companies have gone even further, offering paper brochures that unfold as 3D objects on clients' mobile screens once the client points the phone camera at the brochure.

VR and AR will also become helpful for those cases when the apartment comes empty by staging it with virtual furniture. This way, renters will better understand the space before actually moving in.

Given that digital communications differ from in-person meetings, property managers are looking for ways to communicate online effectively. This is where AI comes into play.

Chatbots, virtual robots, and assistants make renter-manager-landlord communication faster and more efficient. They can handle different types of operations — answering generic questions, getting to know customer preferences, or even holding virtual showings.

Another major advantage of artificial intelligence is assessing pricing trends and making corresponding predictions and analyses (i.e., doing all the "digital footwork" for a property manager, landlord, or realtor).

Automated security systems will help landlords and managers better protect their amenities. The fact that property is protected speaks for itself, increasing its demand among those renters who value security.

Renters can take complete control of their living place — watch video surveillance, reset codes, and enable or disable permissions right from their mobile phones. Some landlords even add drones for area surveillance, making property security systems completely bulletproof. Such technology-driven properties will become common in the rental market in upcoming years.

Following dominating trends blindly had never been a winning approach to software development. Instead, it is better to carefully analyze the future trends for real estate startups and find a way to leverage trending technologies and innovations to drive even more value with the final product. Below are some ideas to use modern property industry technologies for startups, adding value and saving costs simultaneously.

While the price to buy or rent housing continues to grow, the cost to construct a building grows as well. In response to changing market situations, using such technologies as 3D modeling and augmented reality at the stage of the future building conceptualizing and designing makes the most sense. 3D visualization allows for modeling an accurate prototype of a future building. At the same time, augmented reality opens up the way to avoid costly mistakes because of its ability to visualize even the tiniest details. Both 3D and AR perfectly match the LEAN approach, which makes sense not only in building software for startups but also in the construction industry. What's more, these technologies in property management for startups have been here for several years already.

Both AI and ML can be used as real estate management technologies. For example, sophisticated AI solutions can perpetually analyze the situation in a specific real estate market and suggest to the investors the most winning strategies to buy or sell a particular property. Still, this is not their only use case. As for other trends of using ML in property, machine learning works perfectly for detecting anomalies and patterns. They can be used to create a solution for low-risk mortgage approval that will benefit both lenders and borrowers.

Property tokenization is one of the most prominent real estate future trends for startups. This practice stands for the opportunity to transform a certain property into tokens that can be safely transferred between the contract parties.

Smart contracts based on the blockchain ecosystem are among the property management industry trends as well. This technology allows for automating the contract processing, saving time and effort of the parties, and adding more safety and transparency to real estate transactions.

Ready to power your future real estate startup with any of the innovations above? Let Fayrix share our tech expertise!

Taking into account property future trends for startups and the opportunities real estate management technology opens up for startup development in this field, there are some winning ideas to give a try in 2022.

18.2% of Millennials are planning to rent housing forever—this is already a solid reason to think about rental application development, despite several winning solutions already existing. However, the demand for rent and the software to help with this goal is projected to be stable since generation Z is here. According to Forbes, they are projected to spend significantly more on rent than any previous generation.

What's the connection between property management technology trends for startups and open finance? Indeed, there is a logical link. Open finance promises an opportunity to consolidate all the financial accounts within one app, thereby creating a complete and clear picture of income and spendings that may pass by traditional banks.

This idea is especially relevant for gig economy workers (yes, most of them are Millennials we have already mentioned). As a rule, this segment of FinTech services users is "credit-invisible" since they can't prove their actual income. Open finance gives them such an opportunity, allowing them to apply for real estate mortgages and get fair decisions.

There will be 77 million smart homes in the US by 2025, so right now is the perfect time to get started with smart home solutions development, leveraging the best UI/UX technologies for startups. What's more, Gen Z is exceptionally loyal to innovations. They expect their housing to at least have secure Wi-Fi, access control, and manageable thermostats.

Fayrix would be glad to provide management services for startups, build a remote dedicated team, conceptualize your startup idea, design it in the most user-friendly way and create a full-fledged solution following the latest real estate trends and top-notch development practices.

Get in touch with us now for more help!

2022 promises to be a year of massive shifts and innovations in the real estate and property management industries. Generation Z "occupies" the tenant base, lots of renters have started to look for more affordable offerings in the suburbs, and property managers move their focus to overlooked segments of the market.

The post-COVID world will set its own rules, and it is in the best interest of market players to adjust to the latest trends in property management technologies. If you have a real estate business and are looking for some help from digital experts, don't hesitate to contact us by sending us a message through chat or the form below.