Owners' Increase Demand For Property Management Services
Since the start of the pandemic, more small-portfolio rental owners than ever before have partnered with a property manager to run their rentals. Prior to the pandemic, 55% of the rental owners we survey each year told us that they were working with an expert to operate their properties. This number rose to 64% in 2020, and remains elevated two years later at 63%.
THE INCREASING NUMBER OF RENTAL OWNERS WHO WORK WITH PROPERTY MANAGERS
This increase illustrates the degree to which the pandemic-era rental market has complicated the business of owning rental property, from increased regulations to inflated costs, supply chain delays, and labor shortages. As a result, rental owners of all experience levels are turning to property management companies for assistance with regulatory compliance, resident management, maintenance and repairs, and more—which makes
particular sense when you consider that nearly two-thirds of owners don’t live near their rental properties.
WHY RENTAL OWNERS CHOSE TO HIRE A PROPERTY MANAGER
But even as property management teams devote significant energy to client acquisition
and portfolio growth, many have learned that it’s worthwhile to take the time to ensure
that they’re signing the right clients. After the difficulties of the last three years, property
managers told us, they want to work with owners who are willing to invest in their
properties; who understand the delicate balance between profitability and affordability in
the current market; and who will work collaboratively and empathetically with their property
management team and their residents to resolve any issues that arise.
THE INCREASE IN INVESTORS WITHIN PROPERTY MANAGERS’ CLIENT BASE
Since 2018, we’ve watched the population of Accidental Landlords dwindle relative to the
number of investors seeking property management services. This trend has accelerated
in the last year as the seller’s market has given Accidental Landlords a prime opportunity
to sell off the properties they’d rented out as they waited for their value to rise over the
previous decade.
However, with rising mortgage rates slowing down the pace of home sales, a new
generation of Accidental Landlords may decide to rent out their homes as they wait for a
more lucrative time to sell.
Add Your Heading Text Here
THE SHIFT FROM ACCIDENTAL LANDLORDS TO INVESTORS IN PMs’ CLIENT BASE
Today, 76% of rental owners consider themselves investors, while just 24% identify as
Accidental Landlords. However, Accidental Landlords may appear to be more prevalent
within property managers’ client base because they’re still the most likely to seek out their
services: 71% of Accidental Landlords currently have a property manager, in comparison
with 62% of Intentional Investors and 59% of Unintentional Investors.