Industry conferences are always exciting for property management company leaders. They are time for us to step away from the daily grind and proverbial firing line, and focus on the future of the property management and rental industry and our landlord clients.
Most importantly, they provide time to detach and elevate our optics to see what’s rapidly advancing over the horizon as both opportunities and threats for our landlord clients.
Below is a key takeaway for our landlord clients from the 2020 NARPM/Buildium State of the Property Management Industry Report.
“Between 2011 and 2017, a rapidly consolidating group of institutional investors like Invitation Homes and American Homes 4 Rent bought over 200,000 single-family properties across the U.S. Aided by federal incentives, this large-scale transformation of foreclosed homes into rental properties continues to impact the real estate market today.
On one hand, in the aftermath of the Great Recession, these properties have given countless residents a place to call home without needing to obtain a mortgage. On the other hand, institutional investment has taken a small but growing portion of single-family homes off the market, and intensified competition in an ever-consolidating industry.”
If there was ever an 800 pound gorilla in the residential real estate market, these well-funded, huge institutional investment firms are it.
I’m sure you’re thinking “how do I compete when I’m a small investor/landlord with just a few rental properties? I don’t…
- enjoy the deep discount pricing for materials and labor that these firms can get from their suppliers;
- have the scale of operations to reduce my banking/lending costs; or
- have the bleeding edge technology to monitor my financial operations.”
The answer is right in front of us. Always has been.
You use guerilla-style operating tactics on them. (See what we did there?)
How? You outmaneuver them and capitalize on your ability to build relationships with your tenants.
As a smaller operator, you can turn on a dime. You can react to market conditions immediately. As long as you have situational awareness of what the market place is doing in your area, you’re golden. (Hint: Our monthly newsletter is a darn good resource. Each month we track residential rentals in 17 market segments across Central Indiana. Including; average rent prices, average days on market, average $/square foot, average square foot rented, etc.)
At Polaris, we monitor the rental market weekly for near-term shifts. By doing this, we’re able to catch shifts most companies miss. Sometimes the market shifts in your favor. Other times, it doesn’t. We help our clients know not only which way the “market” wind is blowing, but how to prepare or adjust to keep their sails full. This is especially important when negotiating lease renewals. Lest you act overconfident and end up with a vacancy or (gulp) leave money on the table!
Small, local operators have the opportunity to truly know their tenants. They know their personalities and preferred forms of communication. This is something a large institution can not compete with. Providing housing is an extremely personal business. In many, if not all cases, we believe the winner in most situations will be the landlord who understands this critical factor.
We are confident that a tenant who enjoys responsive maintenance efforts, small tokens of appreciation, and the ability to put a name with a face, will choose to keep doing business with that housing provider. There is no incentive to move to a faceless corporation. That is one of the primary drivers for the Polaris 24-business hour response guarantee. Nobody likes waiting for answers to questions or concerns.
So when competing flat out against a competitor on price isn’t to your advantage, pull out the guerilla style tactics to win the day.
If Polaris can assist you in your fight, we’d be happy to chat. Schedule a 15 minute phone consultation today.
Until then, here’s to your continued pursuit of financial freedom with your rental properties!