Property Ownership and Management Data and Trends as of 2022
The rental property market is in the midst of many confusing shifts and changes that are causing low visibility into the future. However, the current state with demand for high rent should stay steady because these conditions will likely stay in place for the next year or two. This article includes a list of market forces and factors, an assessment of what it means to Property Owner and Managers, and suggestions for how to maximize revenue, reduce costs, and generally get the most out of your investment.
- Rents are at an all-time high.
- Mortgage rates are rising, inventory is low (but on the rise), and sales prices have soared, making home purchase less affordable.
- Renters will generally continue to rent rather than buying in this market.
- Rental vacancies have decreased significantly.
- Younger tenants are demanding connected landlords.
- 80% of property managers are involved in coordination & performance of maintenance and repairs, rent & repairs.
- Many landlords have deferred maintenance and improvements during the pandemic.
- Capital expenditures on individually owned property improvements have been on the rise.
- Institutional investors have raised their stake from 18% to 26% between 2001 and 2018, and that number has been climbing even faster the last few years.
- In 2021.Q3, investors bought a record 18% of homes sold, with ¾ of those being single family homes.
- Individual property owners are more likely to own single family homes or smaller multi-family properties, maintain their property, and invest in capital expenditures than business investors.
- According to Fortune Business Insights, the global property management market is projected to grow from $15.10 billion in 2021 to $28.21 billion in 2028 at a CAGR of 9.3% in forecast period.
What it Means to Property Owners
- The rental market is strong, so staying invested should yield good revenues.
- If you bought into the market when mortgage rates were lower or refinanced in the last couple of years to get a lower rate, you’re in a good position to grow your equity stake even while raising revenues over the long term.
- As more rental properties come online and more people are renting, your best hope at raising revenues is keeping your property rented as much as possible (high utilization).
- Top property owner priorities include utilization, tenant satisfaction, and communication.
- Revenue is important, but so is maintaining an attractive property while managing expenses.
- You should expect to spend 10% of your rental revenues on maintenance and improvements each year.
- Technologies that facilitate listings, rent transactions, and coordinating maintenance are important, especially when scaling your rental property business as you buy and rent more properties.
- To keep costs down, repair – don’t replace whenever possible. Usually, repairs cost a fraction of replacement.
- Claiming IRS deductions requires documentation of repairs and preventative maintenance.
What it Means to Small Property Management Companies
- 81% of Property Managers are seeing a rise in revenues. Rents are up so the PM share is, too. But that shouldn’t translate to complacency for managers.
- Top PM priorities include Growth, Efficiency, Owner Satisfaction, and Communication.
- The Residential Property Management market is growing. New management companies are entering the market and creating more competition.
- Adopting modern management tools is an imperative for smaller property management companies. If they don’t, they’ll lose business to more professional, better organized firms.
- In short, if you’re not acting like a professional, you’re going to lose business to the real professionals.
The Problems Upkeepr Solves
In general, you should actively stay competitive with your properties and avoid complacency. Here are some way to do that:
To stay competitive with your property offering: Well-maintained and modernized properties are more appealing to tenants, demand a higher rent payment, and attract tenants in higher income brackets. Upkeepr helps you plan and manage your property improvements and upkeep.
To stay competitive with your professional image: A rental property owner’s professional image is vital to compete with institutional investors who use professional property managers to communicate with tenants and maintenance staff. With Upkeepr, tenants can easily send maintenance requests to you or your property manager. And, Upkeepr helps you document issue resolution, automatically informing others of the progress.
To stay competitive with costs and expense management: Rental property owners need to document repairs for tax and year-end reporting purposes. Upkeepr helps you keep records of tax-deductible expenditures including invoices, receipts, before and after pictures, and detailed notes on maintenance and repairs.
To maximize the value of your asset when you sell: Properties that are well maintained, and have proof of that maintenance, generally sell for higher prices than poorly maintained properties. Upkeepr reminds you of regular maintenance, creates maintenance records along the way, and provides a well-organized repository for any details you want to convey to a prospective buyer.
Besides specifically helping with property maintenance, Upkeepr provides an excellent way to organize all your maintenance records, bringing files and information online so they are better organized, easily searchable, and available at your fingertips from any device.
The following are some source articles used for our market analysis and contributing to this summary.
- iPropertyManagement, Property Management Industry Statistics, July 12, 2022
- Joint Center for Housing Studies of Harvard University, America’s Rental Housing 2022
- ManageCasa, The US Rental Property Market Outlook, March 30, 2022
- Fortune Business Insights, Unites States Property Management Market Size, Share, … and Country Forecast, 2021-2028
- Naborly, 2022 Challenges for Small Rental Property Owners