As we enter 2021, it’s a good time to make some predictions for the year ahead. Though it’s impossible to foresee the future (2020 has undoubtedly taught us that), the current industry trends can tell us a lot. Based on the industry tendencies, we’ve singled out five expectations for the future of the property management industry in 2021:
Digitization will continue reshaping the rental industry.
We’ve almost gotten used to the fact that the world is digital now and most business can be conducted through a smartphone- you can communicate online, make payments online, and even close multi-million dollar deals online.
In the property management world, landlords and property owners have realized it’s more convenient to manage properties and handle accounting online. So did tenants. According to the latest NLA report, rent payments made online are far more likely to be on-time than an average rent payment (92% vs 55%). Also, the percentage of rent payments paid with a credit/debit card have increased by 5%, and the check usage has been falling in the last quarter of 2020.
We believe that digitization will continue transforming the industries in years to come.
Cloud-based solutions will become a necessity.
Along with contactless digital payments and virtual rental showings, all-in-one rental management systems will likely increase in popularity and will improve landlord-tenant relationships in the near future.
The pandemic has literally forced the landlords around the globe to leverage technology and find safe and comprehensive methods to manage their rentals remotely. That’s why multitasking property management software systems are now a fundamental part of the rental business.
Most cloud-based rental management services offer a number of features that help keep data organized and perform business tasks with maximum efficiency. Current landlords should keep that in mind, since many prospective renters no longer see the point in offline methods of interaction if there is a way to pay rent without leaving your comfort zone or submit a maintenance request through an app.
Overall, 2020 has changed the definition of “centrally located” and made it possible to work from anywhere with an internet connection.
More people will be leaving big cities.
The number of people moving out of big cities and renting a single-family home somewhere in the suburbs has been gradually rising in 2020. It’s a large possibility that this is due to the pandemic-related quarantine.
We predict rent prices in the rural U.S states will increase accordingly. At this point, the rent in the states like Maine, North Dakota and Idaho are showing a big increase in rent prices, making potential property investors more likely to consider purchasing investment properties in the rural areas rather than multi-family housing in the urban centers.
However, it’s said that cities like New York and San Francisco will survive the crisis and even see a rapid economic recovery, as the percentage of people who are moving out of large cities won’t have a lasting negative impact.
The new stimulus packages will still be happening in 2021
It looks like the real estate industry is one of the most resilient sectors, with price growth and high home sales over the past year. Due to stimulus packages and federal rental assistance, some of the most vulnerable populations across the U.S. have been protected from evictions and foreclosures. But assistance programs will need to be updated in 2021 to keep helping people who have been affected by the COVID-19 crisis.
Home prices are going to stay strong and mortgage rates will remain low.
According to Redfin’s predictions, American homeownership rate will reach 70% by the end of 2021. With the record-low mortgage rates and high demand for single-family homes, more people will be interested in buying houses. So home prices are expected to grow in the 2% range.
Based on the latest NLA report data, in the last quarter of 2020 single-family homes have been rented faster in comparison to the previous year. And that’s a statistic property investors should keep an eye on.
What are your predictions for the property management industry? Do you believe that the rental market will be getting stronger in 2021?