Change is in fact inevitable in property management and real estate investing. The US rental and leasing market was fundamentally changed by the COVID-19 pandemic in March 2020. While the virus has left several industries ravaged, the real estate market in the US remains relatively robust.
Changes in Austin property management, however, can affect several variables and raise a few concerns for rental owners and tenants. In this blog post we will focus on those particular effects in relation to the Austin rental property market – such as soaring demand and declining inventory.
According to apartment rental application Zumper, the price of a 1-bedroom unit in February jumped 1.1% across the US, while the average 2-bedroom unit saw a 0.9% increase. Keep in mind that it is the most significant one-month increase in rental prices since the start of the coronavirus pandemic. Notably, rental prices are also increasing in Austin, Texas.
As a property management company in Austin, it’s essential that our entire team at 1836 Property Management keeps a keen eye on the real estate and rental market. Doing so allows us to provide the best strategy for investment property rental rates, which in effect, provides ROI (return on investment) and ROE (return on equity) for our clients.
And while there is a certain science to setting rental rates and providing property management services, when unforeseen situations (like a worldwide pandemic) occur, it’s important to research and implement new strategies as necessary. Doing what’s best by the rental property and the residents should always be the bottom line.
How Things Were in the Past
First, let’s discuss the old way things worked, i.e., before COVID-19. The Austin rental property market was very different from what it is now.
For example, while labor, materials and properties were abundant, market demand typically was relatively low.
In-Person and Non-Vacant Showings
Additionally, while properties were listed early, real estate agents and rental owners would show different properties to potential clients in person, and often while the current resident was still living in the property.
This raised several problems. The houses did not look their best and sometimes smelled horrible as they simply were not ready for showing.
As a result, property owners would lose potential future renters while the current tenants had several complaints due to people entering their home.
Unable to Meet Certain Requirements
Additionally, if property managers offered the first available date for a property to be seen, sometimes because of delays with make-ready projects in the home, they couldn’t meet that mark.
Then when new tenants moved in, some had several complaints that only made the situation worse. Inevitably forcing landlords and property managers to make concessions to the tenant to appease them so that they would renew later.
All of these factors were the cause of record low rental rates. Since properties would sit on the market for a longer period of time, rental rates kept declining, which of course was concerning for owners.
On the other hand, when we look at the new way of doing things, a lot has changed. Rentals are in high demand while the supply of labor, materials and properties themselves are low, especially with materials backordered. This is why property managers have opted to only listing those properties that are vacant and move-in ready (or hotel room ready).
Remote or Self-Showings
Additionally, the remote entry or self-showing process has also been perfected so that potential residents can schedule showings anytime with the latest technology. Which has increased focus on a home’s desirability. Homes look better and smell better as they have been properly cleaned and “made-ready” for showing. This process has also allowed for a more fast-paced move-in, where renters don’t have to wait for a property for several days on end.
The evolution of the open house has also certainly taken form on social media. With video and photo platforms like Instagram Live and Stories, Periscope, and Facebook Live, real estate agents and property managers can easily host virtual showings to their whole social network in order to yield new leads.
By engaging in convenient virtual home tours or walkthroughs, prospective home renters in Austin save a fortune in money and time. Rather than spending a whole morning driving from one property to another to tour units in Austin, home renters can now explore several potential new spaces right from the comfort and convenience of their living room in just a fraction of the time, which is excellent.
Now, delays typically only happen because of labor and material issues or unforeseeable circumstances. Take for example, the caution people might be feeling to allow others to enter their home. Because of the new normal, people are no longer willing to let just anyone walk into their homes, and it’s likely this trend will continue in the future.
The effects of all these changes are quite apparent. Homes are renting in four days, 33% faster than the average on the MLS (multiple listing service). And more and more people are willing to renew as they’re either more reluctant to move or have been more satisfied with the whole renting process in general.
And as a side note for investors, due to the lack of rental property supply, many renters are also willing to pay a larger amount just to get their hands on a desired property.
Why Choose 1836 Property Management
One of the most important reasons you may consider choosing a professional property management company to help you during this “new normal” is to keep both your property and your tenants best interest as top priority.
There is no doubt that an excellent property management company will always take the needed precautions and leverage the best tools and resources that allow it to offer things, such as:
- Online Payments
- Remote or Virtual Showings
- Online Maintenance Requests
- Virtual Meetings (Where Applicable)
- 24/7 Customer Support
Everything 1836 Property Management does is based on testing or statistics and expertise. The real world is dynamic, so predicting factors such as how much your home might rent for or how much a maintenance repair might cost takes some strategy or simply some patience. However, using experience based knowledge, can prove instrumental in managing your property successfully.
The Bottom Line
The rental price of a house is tied to the demand and supply for housing. Note that if there are fewer houses available for rent, prospective tenants bid higher on price in order to secure one. On the other hand, if fewer renters are looking for a property, the prices tend to drop as tenants have fewer competitors. COVID-19 has certainly affected both supply and demand of the housing market in Austin, as well as, the way that housing is rented in general.
This new normal has accelerated the existing home search, with tenants and renters narrowing down the list of potential properties much faster than before. While the Coronavirus proved challenging in a number of ways, it certainly transformed specialty tools, such as remote walkthroughs and virtual communication, into de facto standards in the real estate market.
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By: Kayla Gonzales, 1836PM Marketing Manager