Top 4 Reasons the Property Management Companies are Thriving
There are more than 130 million renters and over 23 million landlords in the United States. This number keeps increasing each year. Not every American has hundreds of thousands of dollars to buy a property and rent it out. But there is an alternative in which anyone can take advantage of the huge difference between supply and demand of housing units – property management businesses. To be successful in this business, you have to keep an eye on each and every details of the location you want to target. You should, for example know which of the Battery Park City apartments are available for rent.
Real estate investors and landlords have come to realize the importance of making sure that their tenants are comfortable. This is the main reason, and an increasing number of landlords and property owners are investing in property management services to ensure that the people living in their properties are comfortable. This creates an excellent reputation for the apartments, and that means even when a tenant shifts, someone will move in within a very short time. If you are looking for a property, you may want to check Movoto.com and other online platforms.
The property management businesses are thriving, and if you want to jump into the bandwagon, you may want to know why. Here are the top five reasons these companies are thriving.
Rent-asking price continues to increase
According to data collected and analyzed by the US census bureau, rent prices appear to have been increasing gradually since the early 1990s without significant fluctuations. During the economic recession towards the end of 2007, the rental asking price continued to increase gradually.
On the other hand, property sale prices continue to fluctuate dramatically depending on the Nationwide housing market and local housing markets as well. During the economic recession of 2007 sales asking price is so a drop of close to 50 thousand dollars.
The point is real estate investors should consider renters because they are far less risky compared to fixed and flipped properties. Also, rentals provide passive income that most real estate investors desire. As old and new real estate investors scramble to acquire properties at a silver price the property management companies will benefit the most.
2. About ⅓ of the occupied homes are rentals
The report released by the census bureau also indicated that 31.5% of the occupied properties are rentals. While most owner-occupied properties accounted for 56%, the gap is getting smaller. A recent report released by the Federal Reserve Bank of St. Louis indicates that rental vacancy rates appeared to have been decreasing randomly since 2009. Conversely, property ownership rates what’s a five-decade low in 2017 and have made a significant recovery from the peak experienced in 2004.
So, what does this mean for property investors and property management companies? As more people continue university in rentals over property ownership, the diamond for rental properties is likely to increase as investors continue to fill that gap the demand for the property management services increases. This is why these businesses are thriving.
3. Advancements in technology
property management companies continue to flood the market with someone lucrative success. Fortunately, savvy technology intrapreneurs are following this course. This is because there are many challenges with setting up a property management company. It is a highly demanding 24/7 sort of a business model.
If an AC fails in the middle of summer or there is a water leak in the kitchen, all these activities fall to the property management service provider to handle them. To meet the increasing need for comfort in rental properties, property management companies must have dependable staff near every location and inefficient way to communicate with these employees, tenants, and other local handy-men.
These increased responsibilities have led to inventions of property management platforms for both long-term and short-term rentals. These platforms attempt to solve property management issues by enabling property managers to streamline communications with the guests, schedule cleanings, and other activities.
4. A win-win scenario
Most people cannot afford to purchase properties, manage them and let them out. That means the property owner must hire at the departure to manage the day-to-day operations of the property. Generally, well-managed properties attract and retain tenants easily. That means a reliable stream of income for the property owner.
On the other hand, tenants tend to enjoy more direct contact with the experts running and managing apartment buildings. As the market becomes more competitive, the need for proper building management cannot be ignored. Therefore, property management companies benefit from the increasing demand for rentals while investors benefit from a reliable stream of income, especially if their properties attract and retain tenants.
The point is; property management companies have been thriving in the modern real estate industry for a good reason. These companies are launched to streamline the property management process. This is a win-win situation for all the parties involved. As landlords pay a property management fee to these companies, they are assured of a better stream of income. On the other hand, tenants are likely to well-managed apartments.