I was thinking about how this pandemic will shape not only real estate but business as a whole once the world gets back to “normal”. Just looking at the amount of businesses forced to close by the government has led to an unprecedented number of people laid off. Today the national unemployment numbers were released which totaled 3.3 million newly unemployed Americans. Because of the effect the pandemic has had on local business, products and strategies will need to change to be updated to ensure their survival in any environment.
When you look at real estate you see how many different professions and vocations are negatively affected. Agents and brokers cannot hold open houses, private showings, access their office, or lease property. Contractors are losing business because people don’t want them in their homes or are postponing renovations because they want to hold on to their cash. This all has an effect on hardware stores and employees, tenants, landlords, and investors as a whole.
Though most figured some sort of market correction was coming, no one could have predicted this virus and everyone is suffering the consequences. Because some businesses are able to weather these times, it shows there are some techniques that can be deployed in most situations. These functions and services can will be used by the businesses that survive and new business that are formed from this event. Below are some of the business strategies I thought of that may have more of an emphasis in real estate going forward:
1. Going Virtual
Having the ability to reach consumers at home is paramount during this time. Industries such as movie theaters and gyms rely on customers to attend their place of business in person. Theaters were already competing for market share with streaming services such as Netflix and Disney+. Not being able to provide content to customers has completely stopped revenue streams all together. Gyms and personal are in a little better position because they can provide online workouts and live streams to clients.
Real estate professionals can use virtual and online technology to enhance their business as well. Agents and landlords can provide a virtual walkthrough experience to prospective clients or tenants. Using a 360 camera, you can capture the entire interior of a dwelling to give the viewer a tour without being at the property. This not only saves time but provides convenience to both parties. The interior walkthrough can also be provided to contractors to show them what the interior currently looks like to give them an idea of whether it’s a project they want to take on. Having this ability during the current pandemic could have allowed agents to show properties without being at the properties or allow landlords to show their property to fill vacancies.
2. Online Rent Collection
I could have easily called this one Property Management Software to track all aspects of your rental. A number of landlords (myself included) still receive their monthly rent by receiving a check in the mail or collecting it themselves directly form the tenants. While this may be feasible for small mom and pop landlords, if you plan to scale your portfolio this quickly becomes inefficient. Tenants can set it up in the software where they can have automatic payments or paying manually. This provides convenience for both parties as money is taken from one account and deposited in the other.
With the current pandemic, tenants don’t want other people showing up to their house if its not an emergency or don’t want to touch items that may be unsanitary such as mail. This is where online rent payments are useful. The landlords can collect rents without leaving their house and continue to practice social distancing. Unfortunately, with a lot of people being laid off, tenants and landlords will likely need to work out a payment plan where the rent is discounted for the month of April due to financial hardship. This is where the one-time payment feature is useful. The tenant can pay the discounted rent amount and not be punished with any fees that may normally be applied.
3. Keypad Locks
As simple as they are, keypad locks provide convenience, save money in the long run, and be useful during this pandemic. If rental property owners are trying to rent out a vacant unit, they don’t need to be at the property for a prospective tenant to see the property. The entrance code can be provided and the tenants can view the property on their time and the code can be changed remotely once the showing is complete. The chances of being locked out for an existing tenant are reduced as they no longer worry about keys, which typically costs them a fee if they have to be let in to their own unit. For maintenance requests, a handyman can be provided a temporary code, perform the repair, and leave without needing the door opened for them.
This is also a common strategy with short term rentals (i.e. Airbnb, VRBO, etc.). Renters show up for several days and use the code to enter the property and when they are done, they don’t have to worry about returning a key. The code is just changed prior to the next renter arriving at the property. Between renters a cleaning crew can use the key code that’s provided to them and have the unit ready for the next renter. With keypad locks, owners of long-term rentals do not have to worry about changing the locks after each tenant turnover, they just need to change the code so money is saved in the upfront investment.
These are just some ideas I see real estate professionals utilizing in the future to help maintain and grow their business. I know these are some of the strategies and processes we will be implementing with our properties. This will allow us to focus on the key areas of our business and provide a better living experience to those who are creating their livelihoods at our properties.
Mike
