The Future of Property Management: Will Coronavirus Change Everything?
Undoubtedly, Coronavirus has changed the way we do business in America. Even as states begin to reopen, small businesses will continue to struggle financially for months to come. Some may not make it. Others have perfected virtual work environments during this time, proving that companies can succeed with many employees working from home. As a result, buildings may see increased vacancies as more businesses downsize and continue teleworking. That leaves the future of property management in question.
Some real estate experts predict the U.S. economy could shrink by about 6% this year alone. Historically, economic downturn cycles last about five and a half years on average.
However, this economic crisis is global, and it’s completely unprecedented. Property owners and managers are struggling too. What is the future of property management? Will Coronavirus change everything?
How Property Managers Can Reopen Safely
We’ve already provided you with in-depth resources to help property owners and managers reopen retail, office, and industrial properties safely. We’ve also covered how owners and property managers should deal with out-of-work tenants. The health and safety of you and your tenants should be the number one priority. Even as businesses begin to reopen, property managers should continue to follow federal and state guidelines to minimize the spread of COVID-19.
Some guidelines should remain in place:
· Individuals should wash their hands often with soap and water.
· Don’t touch your face or eyes with unwashed hands.
· Remain at least six feet apart from other people.
· Use a face covering or mask when in a crowded area.
· Stay home whenever possible.
The Future of Property Management
Commercial and residential property management looks different than it did just a few months ago. Many residential tenants are out of work, unable to pay rent, and facing possible eviction. Office, retail, and industrial tenants have seen dramatic drops in sales.
Inevitably, we will see companies downsize or close altogether in the coming months. Many business owners now see that employees can work from home effectively, therefore eliminating the need for large office space.
With economic instability and downsizing all but certain, property owners and managers now face an uphill battle.
Industry experts say commercial and residential real estate could begin to rebound as early as next year. But it will likely be many months – or even years – before property managers see occupancy rates as high as they have been before this crisis.
Keeping Properties Occupied
In this uncertain real estate landscape, how can property managers protect owner assets and their own livelihoods?
Change Properties to Meet Demand
Offices, retail centers, manufacturing facilities, warehouses – everything is going to look different in a post-COVID world. Property managers must rise to meet the changing demands of commercial real estate tenants. For some properties, this might mean redesigning the interior, creating more space between desks or cashier stands. For multifamily properties, it might mean closing down or reducing occupancy in common areas like gyms or pools. For everyone, it’s going to mean being flexible and changing quickly to meet tenant needs.
Continue to Earn Your Tenants’ Trust
Relationships are an incredibly important part of real estate property management. Amid Coronavirus, interpersonal connections are even more essential. Even though property owners may be feeling the financial pinch, it’s your duty as a property manager to continue serving tenants well.
One way some landlords are working with their clients is to “blend and extend.” With this leasing option, the landlord allows the tenant to delay payments for a set period of time, and make them up over the course of the remaining lease. Some landlords may even extend the lease to give the tenant more time to pay. Not all tenants can afford to stay in your property as the economic fallout continues. But many will. To that end, property managers who negotiate with tenants and help them weather this crisis will earn their trust and respect. As a result, tenants will feel a sense of loyalty, making them more likely to continue renting long after the crisis is over.
Focus on Digital Management
Over the past two months, we have learned just how much we can truly do from home. As we slowly reopen businesses, many workers may continue to work from home. There’s no reason property management can’t do the same. With so much emphasis on social distancing, property managers are finding innovative ways to oversee assets. There are countless online options for managing tenant payments, lease agreements, maintenance requests, and other daily tasks. Take advantage of these virtual tools and limit face-to-face interactions when possible.Virtual tools are also useful when showing and leasing properties. Instead of in-person tours, many property managers are moving towards virtual tours or video tours with potential tenants.
The future of property management almost certainly looks different. However, by being proactive and staying flexible, owners and managers alike can ride out this crisis.
Looking to expand your property management business? Please contact us to learn how we can help.