Real estate investor, Founder/CEO of TurboTenant: free landlord software – rental marketing, tenant screening and rental applications.
We’ve heard it a million times in the last four months, stated in a variety of ways: These are unprecedented, surreal, bizarre and sometimes scary times. The way we run our businesses and our lives may be altered forever. Change truly is the only constant, and we collectively feel that now more than ever before.
To better understand how landlords have been adjusting to this “new normal,” we heard from nearly 1,000 active customers to learn what immediate changes they have made, how they have navigated precarious situations, what permanent changes they will make to the way they run their businesses and how the future of landlording may change indefinitely.
The real estate industry, as well as the rental industry, has been slow to adopt new technologies. But now they have to in order to stay in business.
Over 30% of landlords we surveyed said that they would only market and tour their rental properties online, and that process would become standard moving forward. Buyer behavior has also changed, and the frequency in which large purchases, including homes and vehicles, happens remotely has increased as well. We have entered a new landscape where making large purchases and decisions that affect your money and life are comfortably done in an entirely virtual environment. It doesn’t appear the trend will reverse.
Landlords can still utilize a multichannel approach to garner the best results. This may include traditional methods such as yard signs and flyers combined with online marketing and an online rental application process, effectively merging offline and online worlds. This way, you can take advantage of tried and true methods, while streamlining and finishing the process online, broadening your reach and shortening the vacancy period.
Online Rental Applications
Forty percent of landlords told us they would only use online rental applications to fill vacancies. This makes sense in a world that is increasingly reliant on the digital environment to get things done, especially through the lens of a pandemic, stay-at-home orders, social distancing and varying levels of comfort navigating the Covid-19 outbreak.
The reliance on the digital world and working from home is not going away anytime soon either, and it may never go back to pre-pandemic levels. According to a Slack survey, productivity in new remote workers can initially take a hit while adjusting to the new methods. Over time, tools and strategies are utilized and developed, and productivity increases. The real estate industry may historically be slower to adapt, but over time, transitioning core functions online will increase productivity and the long-term ROI of an investment property.
Only a fifth of landlords we surveyed said they would permanently change how they signed a new lease with tenants. Often, landlords have leases they have used for years for their property, and many are reluctant to change this process as well as the handing over of the keys that usually happen after both parties sign the lease. With trends moving more and more into the digital world, specifically in the real estate industry where home closing is starting to be done digitally, the expectation for a digital signing should help drive adoption for reluctant landlords.
Video Call/Chat to Interview Tenants
Many landlords feel like an interview or meeting is essential to establishing the tenant-landlord relationship. And while the entire process may happen virtually, connecting a face with a name is still a critical part of the tenant screening process. The same reluctance a landlord may have to sign documents digitally may be holding them back from adopting video calls/chats for the interview process.
While this mode of conducting business is new for many landlords, getting on board with new ways of renting and filling vacancies might become an essential part of filling vacancies during a pandemic. No one can predict when or if things will go back to a pre-pandemic way of operating. While the initial shift in March or April may have been jarring, preparing for the long-term and protecting your business and the ROI of your rental property might mean moving all steps of the rental process to the digital world.
Avoiding Vacancies And Evictions
Avoiding vacancies and evictions has been an essential consideration since the beginning of the pandemic. Some landlords are offering lease concessions for current tenants to avoid vacancies, and according to an Elliman report, rent concessions on new leases in Manhattan and Brooklyn increased by 8% and 31.8% respectively over the same month in 2019. Other landlords have either set up payment plans or canceled rent for their tenants who were experiencing financial difficulties.
While an eviction may be necessary in some cases, working to avoid them may be more financially advantageous. Keep the lines of communication open with tenants. There may be potential to set up payment arrangements or deferments and lease modifications, such as sub-letting or roommate agreements, that may alleviate some of the tenant’s financial burdens and allow both parties to navigate these difficult times with more ease and avoid eviction proceedings.
While transitioning to a virtual environment may have been a luxury in a pre-pandemic world, it is now necessary. Landlords who have adapted to going entirely virtual can expect continued success with their rental business, and those who haven’t should expect to execute each step of the rental process online to prepare themselves to operate and thrive in a virtual world.
While transitioning to a virtual environment may have been a luxury in a pre-pandemic world, it is now necessary.While transitioning to a virtual environment may have been a luxury in a pre-pandemic world, it is now necessary.