Inflation, rising interest rates and recession fears are on the minds of apartment property managers, concerns they expect to keep affecting decisions through the rest of the year on topics from expense controls to staff pay to the products and services offered.
Industry professionals discussed their major concerns during the National Apartment Association’s Apartmentalize conference in Atlanta over the past week. Thousands of professionals learn about new technologies for managing properties, tips of the trade for handling maintenance calls and how to deal with difficulties in hiring and retaining staff.
Here are some of the issues apartment industry is expected to be dealing with in coming months:
Taylor Blades, Ross Cos.:
Ross Cos. has struggled with staff turnover, as have many property management companies, said Blades, marketing director for the Bethesda, Maryland-based property manager with about 10,000 apartment units in the Mid-Atlantic.
Blades expects that Ross will try to give its employees more fulfilling job duties to keep them motivated and with the company.
“Employee turnover has become almost more costly than resident turnover,” she said. “We’re trying to remove the high-volume, low-value tasks out of our staff’s routines.”
She added that “today’s workforce wants to make an impact. They don’t want to spend hours working leads, entering maintenance tickets, paying invoices.”
Ross has acquired software that allows renters to communicate with an online bot for routine questions and complaints, she said.
There was some resistance at first from staff who were worried about losing their jobs to a robot, but they’re coming around, Blades said.
“More employees are accepting of the fact that a bot can do some things well and that allows staff to focus on the things that they do well,” she said.
Kim Young, Fogelman Properties:
Fogelman Properties, a Memphis, Tennessee-based property manager, has about 31,000 apartment units primarily in the Southeast.
The company this year plans to expand its offerings of self-guided tours and virtual leasing agents for potential tenants and new technology for managing maintenance calls, said Young, vice president of shared services.
Young also expects that Fogelman will continue to work on improving staff retention by creating more opportunities for promotions.
“Our industry has a terrible reputation” for career paths, Young said. “You need to be able to take a skilled leaser and give them a career path that isn’t outside their skill set.”
Justin Wald, Berkshire Residential Investments:
Berkshire Residential Investments, a Boston-based property manager with 37,000 units, expects to review its employee compensation this year, said Wald, vice president of marketing.
That’s because it’s becoming harder to recruit new employees and job candidates also expect higher pay.
“I’m not saying blow salaries out of the water right now,” Wald said. “I’m just saying you need to take a step back and understand those salary expectations are potentially reality.”
John Helm, RET Ventures:
Staffing is a major issue for property managers, said Helm, founder of venture capital firm RET Ventures. It’s difficult to recruit and retain employees in the multifamily property management sector, he added.
If it’s possible to use technology to handle tasks normally assigned to a human staff member, landlords will consider it, Helm said. That’s a big reason for the rise in popularity of self-leasing. Many consumers are comfortable with touring an apartment without a sales representative guiding them.
“There are technologies that you can string together and effectively rent an apartment without any human interaction,” Helm said. “Maybe it’s over the phone, maybe it’s an online chat, but you can get an apartment leased without somebody having to actually physically come into a leasing office."
Property managers are also purchasing software that manages the move-in and move-out processes for renters, he said.
Broader economic factors are also driving the move to adopt new technologies, Helm said. Rent growth and leasing volume are both slowing and that has given landlords the incentive to explore ways to improve operations.
Some of the property management companies in RET’s investment portfolio have saved as much as 40% in staff costs by adopting these technologies, Helm said.
Scot Cauley, Allegion:
Competition among apartment property managers has amped up in the Southeast, most notably in Atlanta and Huntsville, Alabama, said Cauley, a project manager in Macon, Georgia, for the Schlage subsidiary of security-equipment manufacturer Allegion. Landlords are looking for any edge to find the best tenants.
Landlords of older properties are racing to invest in upgrades, Cauley said. Many buildings still use old-fashioned keys and locks for both individual units and building access. Landlords for properties dating to the 1960s and older are looking to replace physical keys with electronic keycards.
“They’re concerned about liability,” Cauley said. “You never know who has a copy of a key for apartments, even if you’ve changed the locks.”
But recession concerns are weighing on other property sectors, Cauley said. Office landlords, hospitals and schools have slowed purchases of new security equipment for doors and other building entry products.
Pete Regules, Cort Business Services:
Constantly shifting remote work policies make it difficult for professionals to decide where to live and what type of apartment they should rent, said Regules, an area manager for north and central Florida at Cort Business Services, which leases furniture to landlords.
“Your boss may say that you can do your job from anywhere and live anywhere you want,” Regules said. “Let’s say you tell your boss you’re moving to San Diego. But then they might pull back to the main office after a few months.”
Fear of the unknown has increased the number of renters who are interested in furnished apartments, Regules said.
“You don’t know how long you are going to be in a place, so you are trying to avoid making big purchases,” Regules said.
A growing number of apartment landlords are either converting a percentage of units at their properties to furnished apartments, or earmarking a set number of unfurnished apartments that can be converted on-demand to furnished units, Regules said.
Javier Gomez, National Car Charging:
Apartment landlords know that electric vehicles are coming and they know that many motorists will want to charge their vehicles overnight at home.
Property managers realize they need to install electric vehicle charging stations in their parking decks and parking lots. And there is plenty of federal grant money and local and state subsidies for charger installations, said Gomez of National Car Charging in Los Angeles.
But many property managers are still taking a wait-and-see approach, Gomez said.
“One owner I know wants to do it and he’s ready to pay for it, but he said that he only has two electric vehicle drivers at his property and he’s got 60 units,” Gomez said.
Landlords of older properties also face potentially huge installation costs if their existing electrical infrastructure is outdated.
“A property manager looked at it but it was going to cost $90,000 just to get the correct voltage to his building,” Gomez said.
Kendra Larson, Cort Business Services:
Property management companies are rushing to add new technology to help with tasks that run the gamut from managing sales teams to fielding tenants’ maintenance service requests.
They’re also increasingly using bots to handle routine calls and complaints from renters, said Larson, a regional sales manager for New England at Cort Business Services. But these virtual human agents aren’t good at answering every question, she said.
“There’s one question that a bot can’t answer,” she said. “It can’t answer, ‘Tell me what it’s like to live here.’ The bot freezes up when you ask that.”