The Future of Real Estate and Property Management After COVID-19

The COVID-19 pandemic is changing the way that businesses operate across industries, and that includes real estate and property management. 

Property Management Inc. Vice President of Residential and Commercial Randall Henderson offered a glimpse into how real estate and property management will change after the pandemic. One thing is for sure: Both will be altered forever by COVID-19. Henderson noted that more and more personal property owners are hiring real estate professionals and property managers to deal with the impacts of this crisis. 

Fortunately, Property Management Inc. is prepared to help franchisees navigate these troubled times. He noted that PMI has always been acutely aware that the property management industry changes rapidly. For this reason, the brand benefits from offering four different pillars of property management: residential, commercial, association and short-term rental management. Thanks to multiple revenue streams, PMI is well-positioned to thrive in just about any economic climate. This is not an accident, as the brand was founded around the time of the Great Recession. 

“When the financial crisis hit about 12 years ago, so many properties were foreclosed on, and Americans were looking to rent in record numbers,” Henderson said. “It put a lot of pressure on PMI to become a better model for investors. When PMI was founded in 2008, we were focused exclusively on the residential side of the business, but we learned that that isn’t enough. We began looking at other types of property management. Our bread and butter is still the residential long-term space, but we’ve opened ourselves up to make great investments in all corners of the industry.”

According to an April 2020 Curbed report, the real estate market going into COVID-19 was tight. The report noted that supply was at near-record lows nationwide with demand near an all-time high. 

“This combination means home prices are also near all-time highs in most cities as many potential buyers are bidding on a limited supply of homes for sale,” the Curbed report stated. 

In terms of the future of real estate after COVID-19, Henderson cautions that things may not ever return to normal in the property management space. Although supply and demand have remained consistent, rental prices (along with home prices) are rising. For residential property, landlords and tenants should get used to a new norm, one that includes virtual showings, better cleaning/sanitizing practices, and above all, better communication. For this reason, Henderson said, property managers and landlords should get in front of the changes by proactively communicating to tenants to work with them during COVID-19 and create solutions. 

Meanwhile, in the commercial property space, the situation is more dire. Struggling brick-and-mortar tenants should reach out to landlords to discuss possible strategies for success,” he said. “There is also a significant chance that real estate prices will drop and more commercial spaces will become available. For incoming tenants or emerging pandemic-proof businesses, right now could be a great time to negotiate with cash-strapped landlords.” 

According to Henderson, the real estate industry should pay close attention to what the federal government will do in order to drive down interest rates and stimulate home buying. The recently approved $25 billion in direct tenant relief is a very positive step in including landlords in helping people keep their rented homes. This pandemic could also provide a great opportunity to reevaluate and restructure the real estate industry in general, he said. Now is a good time to shape policy and practices so property managers can be confident with how they communicate with tenants moving forward. 

“Whatever the government does to support residential real estate will also extend to commercial real estate,” he said. “The same way most Americans didn’t want to give their $1,200 stimulus checks to landlords, business owners do not want to use SBA loans to pay rent. The government had to keep this in mind when creating policies. It’s important to watch what the federal government will continue to do to drive down interest rates to stimulate home buying.” 

The future of real estate and property management may be somewhat uncertain at this time, but regardless of what happens, PMI will continue to offer top-notch support to franchisees. The brand has already started by offering online showings and making adjustments on maintenance. 

“Right now is the best time for us to work closely with franchisees and be there for them and help them feel confident with how to communicate with tenants,” Henderson said. 

The startup costs for a Property Management Inc. franchise range from $42,550 to $166,600. The franchise fee ranges from $35,000 to $128,600. To learn more about franchising with Property Management Inc., visit https://propertymanagementincfranchise.com/.