How Property Management Software Can Help with Oversupply in the Rental Market

Written by Posted On Tuesday, 10 May 2016 12:54

A new supply of apartment units has outpaced demand in eight of the last nine quarters, National Real Estate Investor notes. In 82 markets tracked, there were 13,559 units above demand. If you are a property manager in a market where over-saturation threatens to affect your occupancy rates, learn how property management software can help you deal with this trend.

What Today's Real Estate Market Means for Property Managers

In recent years, property managers have enjoyed an owner's market. Rent prices are high, vacancies are down, and property owners are content. All these things make a manager's job easy.

Yet it should be clear from the oversupply of rental units that the rent growth many markets have seen as of late is unsustainable. Tenants don’t have to settle for high rent when there are comparable units available elsewhere for less money.

Additionally, an oversupply of units drains the amount and caliber of leads. Property managers may notice that it takes longer to fill vacancies, or that it is harder to find qualified tenants due to the sheer number of vacant units needing occupants.

Current trends will make it somewhat more difficult for managers to keep owners happy and increase apartment occupancy rates. It's just harder to do an effective job during times of scarcity. 

Yet there are ways to make the best of this situation, and there is a "shadow market" of demand poised to change things. Remember, there are still many renters living at home who are waiting for rent prices to become more favorable before moving into their own apartments. As rent growth slows, these shadow renters may decide it is finally time. Anticipate future growth and stay poised to thrive with property management software.

How Property Management Software Helps During Market Slowdowns

When the market is slow, anything you can do to stand out will help you gain a competitive advantage. Property management software lets you easily create an attractive website for your apartment building and push out listings to aggregates. When you cast a wide net and put your property in the best possible light, you’ll naturally gain the attention of desirable tenants.

If rents are high, your existing tenants may be wondering if they should move somewhere cheaper. By being responsive to their needs and providing excellent customer service, you can help keep your tenants happy and reduce turnover in your apartment complex. Anything you can do to streamline property management duties, stay on top of maintenance, and demonstrate responsiveness will increase both tenant and property owner satisfaction in tough times.

During a slow period, property managers can keep apprised of local rental trends and work with owners to find a good balance. It may be worthwhile to incentivize renters with a "free month" or lower the rent to get tenants in vacant apartment units. Property managers can even suggest taking a month off to modernize apartment units with simple repairs that freshen the unit and make it look better than comparable stock.

Software makes it easy for property managers to communicate with owners, show value, and track trends to make informed choices when the market is oversaturated. If you keep on top of maintenance, stay responsive, and strive to add value for owners and tenants, you will get through a down market.

Property managers, what other tips do you have for coping with oversupply?

 

 

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Nat Kunes

Nat Kunes is the Vice President of Product Management for AppFolio. He works on a daily basis with property management professionals to identify industry trends and product features that are included in AppFolio's property management software.

 

www.appfolio.com/

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