Around one-third of Americans are renters. Some rent apartments in the city, some rent ranchers in the country, and others rent large, single-family homes in the suburbs. Regardless to where you live, as a renter, you develop a business relationship with a landlord or property manager.
A good property manager has a great deal of responsibilities. He answers incoming calls each day, screens tenants, collects rent money, responds to maintenance requests, and he’s responsible for marketing and advertising of vacant properties, etc. Scott Wallace, founder and CEO of Wallace Property Management Group, specializes in mid-to-upper-end residential properties and offers franchise property management services throughout the country. Throughout his career, he’s seen technology evolve, and it has impacted his day-to-day life and career profoundly. Technology impacts the property management industry so much so, the effects are passed onto you, the renter, as well.
Software and smart phones
Software systems have helped property managers streamline many of their responsibilities. Wallace currently uses a system called Propertyware. Through automating many of the tasks managers previously had to calculate or perform on their own, these systems foster an environment for increased efficiency, and the expansion of the level of knowledge and guidance to landlords, tenants, and franchise owners.
“I’ll give you an example, one thing that we do that differentiates us from other property management companies is we do a minimum of two property inspections per year. We walk through the house and we just make sure the house is being well-maintained by the tenants. We have apps that interface with Propertyware, so when we’re walking through the house, we can actually do the inspection on our iPhones or an iPad. If we find a hole behind the wall in one of the bedrooms [for instance], we can take a picture of it and, at the end of the inspection, we can sync it and it literally interfaces with Propertyware and everything that we need to communicate to an owner and a tenant is in that one document in a PDF format,” he explains.
Tenants and owners can also go onto a portal on Wallace’s website and look at all of the activity on their account, they can see when the rent payments posted, inspection details, pictures, profit loss reports, basically anything and everything a tenant or landlord would need to know about a property. This level of transparency makes for a better business relationship for all parties involved.
Customer service is a major complaint across many industries. According to Salesforce, 45 percent of customers will abandon an online transaction if their questions or inquiries are not address in a timely manner. Additionally, 89 percent of us have stopped doing business with a company after experiencing bad customer service. It’s frustrating when you have an issue with a product or service, and you cannot get to knowledgeable person who can help you. When it comes to your home, you may have appliances that malfunction, the heat or a/c may break, for instance. Therefore, getting in touch with someone is paramount.
“We use VOIP so when messages are left at the office, they’re left on our computers and left on our iPhones as a WAV file so we can listen to those messages while we’re out in the field. We don’t have to be tied to our desk all day, property management is one of those businesses where it’s really hands on… you have to be in the field and [technology] enables us to do that,” Wallace explains.
Property management is a $69 billion industry and it employs around 750,000 million people, according to IBIS World data. Property managers have several budgetary considerations. Rental income, vacancies and advertising, repairs and maintenance, and administration are just a few of the cost factors. Software programs have automated a great deal of this budgeting.
For someone like Wallace, who offers franchising opportunities, he has additional budgeting responsibilities. “As you know, with any franchise system, there’s royalties involved, each franchisee is paying the franchiser,” he said. “That software allows us to do a lot of that automated, where I’m not having to go in and say okay, you’re gross revenue this month was this number and out of that number, you owe me 6 percent and here’s an invoice. The back-end system does a lot of that calculation for us…it’s been really helpful in that respect.”
Some software programs help determine your monthly rent payments as well. Traditionally, owners and managers set rental rates based on the prices of comparable properties (same size, similar location, same school district, same amenities, etc.), they may also attempt to gauge the level of demand for a neighborhood or property, and other factors like market competition may come into play as well.
For apartments in particular, the traditional method of pricing involved the same rate throughout a complex for each sized unit. For instance, a one-bedroom may be $900, a two-bedroom $1,000, and a three-bedroom $1,200. There may be a little variation if a unit had a washer and dryer or it had upgraded appliances, but other than that, pricing was relatively stable throughout the building.
Now, many property management software systems perform these rent calculations automatically, determining a monthly price based on a plethora of data. The price on a given apartment could change in a short period of time, resulting in two people paying a different price for the same model unit. The only difference being their move-in date. Therefore, if you move in during a time of year when rentals are in lower demand, you’ll likely get a much better rate.
At the same time, with software allowing for increased efficiency in landlord and property management operations, this may result in lower costs across the board, as there are likely less administrative and maintenance fees that are passed onto you.
What the future may hold
Intel co-founder Gordon Moore’s famous law says, “The number of transistors incorporated in a chip will approximately double every 24 months.” We have seen computing power increase dramatically over the past decades and since the turn of the 21st century, devices appear to be getting smaller, yet increasingly powerful.
It’s difficult to gauge the degree to which automation will become the norm in fields like property management. Will you be able to rent a home without ever even coming face-to-face with a human? In Wallace’s opinion, we have a delicate balance to maintain.
“When you think 5 or 10 years down the road, you have to be really careful when rolling out new [technologies]. … We did something as simple as add a new extension to our phone to try and get people to the right place and we receive a lot of complaints,” he said. “There is a delicate balance between technology and that human interaction that you have with your customer. Finding that balance is the key. I try to think about how I can enhance the face-to-face interaction I have with my customers through technology [rather than] how can I create technology to prevent people from calling me, or to avoid having to meet people out at the house. There is no technology that can replace human interaction, if you plan on being in the business long term … [because] that’s what people want.”