Big things are on the horizon for real estate professionals involved in rental properties. In 2015, Dionne Searcey at The New York Times highlighted the fact that more Americans were renting and paying more, while homeownership fell. The article did much more than present relevant statistics. Dionne also described how the two trends were connected to one another. According to her, “the nation’s homeownership has been falling for eight years … the flip side of the decline is a boom in rentals and a significant rise in the cost of renting.”
She wasn’t the only one to draw public attention to the shift and its implications, either. Later that same year, Gillian White at The Atlantic shared her own thoughts about Americans renting more. She emphasized an especially bleak future for renters over the course of the next decade. “Low vacancy rates—as more people move into rentals and fewer move out—have meant skyrocketing prices,” she explained. There are also economic and demographic variables contributing to the dilemma. In other words, most millennials haven’t accumulated enough wealth to offset the rapidly rising rental costs and retiring Baby Boomers without property assets to rely on are worse off still.
Aspiring landlords and other real estate professionals have a golden opportunity on their hands. Almost everything you can find published on the subject was written from a decidedly pessimistic viewpoint. While the majority of renters aren’t necessarily inclined to like their landlords, that doesn’t mean they should be totally vilified. Fortunately, Kevin Perk at BiggerPockets did us the favor of shedding some light on why landlords get such a bad rap. He suspects that some of the contention is inherent to the business because of how sacred the home is considered by most people. Kevin also admits that poor landlords do exist and they make it extremely difficult to change the public perspective.
The real opportunity for fresh landlords lies in finding ways to create value for renters instead of reinforcing the status quo. That doesn’t mean you should neglect conventional wisdom and industry best practices–only that you shouldn’t limit yourself to them. Staff writers at the American Apartment Owners Association (AAOA) put together an informative overview covering eight tips for new landlords. They stress the importance of everything from legal compliance and meticulous documentation to proactive repairs and appropriate tenant screening.
Many of the topics probably sound more daunting than they actually are. There’s definitely a learning curve to becoming a successful landlord but that doesn’t mean the experience has to be unnecessarily agonizing. New landlords can very easily reduce the overall burden of their responsibilities by utilizing reliable technology. For instance, there’s now robust software that can automatically facilitate a tenant credit check while simultaneously running reports on annual residential turnover. Those were activities that landlords had to do manually, and they could be particularly time-consuming.
There are probably a few individuals who remain skeptical about the use of technology. Consider the thoughts shared by Forbes contributor, Nathaniel Kunes, who underlined four trends that would impact the rental market in 2018. The fourth and final point he mentions is tech disruption. According to him, “the use of intelligent systems, machine learning, and artificial intelligence (AI) applications in software will, increasingly, be a huge agent of change in the real estate industry.” He seems to suggest that the most successful real estate professionals will tap into valuable data to inform decisions and generate more value.
Suffice it to say there are plenty of opportunities for those willing to experiment. Becoming a landlord isn’t an easy undertaking, but it’s also far from impossible. Don’t cut corners and eschew solutions that seem too good to be true, as they often are. Remember that tenants are long-term customers who ought to be treated with dignity and respect. That’s the easiest way to avoid mistakenly tarnishing the reputation of landlords everywhere.