The convenience of having all managed units in one place has been the normal status for multifamily operators. However, this characteristic becomes a restraint on how much a property management firm can grow. It’s hard to recreate the home team advantage of management when units are all in different geographic places. For building operators and asset managers of multifamily buildings looking to move into the single-family rental market, proximity is a challenge. However, technology is expanding potential reach into a more geographically decentralized plan.
The single-family rental market is taking off. Millennials and Gen Z are showing interest in the benefits of a single-family home without the burdens of a mortgage or maintenance, the single-family rental home is an attractive option. All of the yard and space without the 30-year commitment. These homes are often located in neighborhoods where many of the homes are rentals, too. These places aren’t a short-term fix but a longterm solution.
While the appeal of living in a single-family home is understood and renters are ready to sign, managing these single-family rental homes is a bit more complicated than a multifamily building. Under a single roof, a maintenance team and a leasing agent could operate full days while never leaving the premises. Single-family homes are a different story as units are no longer within immediate proximity. The game board has been expanded and technology is making management possible.
Starting with the lease
Leasing agents have traditionally been very limited by geography. After all, they can only show so many homes in a day, provided the homes are in close proximity. “We had leasing agents trying to show homes but they could maybe only show two homes per day,” said Demetrios Barnes, Chief Operating Officer at smart home technology platform, SmartRent. “During this same time, we were also spending hundreds of thousands of dollars in broker fees.” The table shifted when technology evolved simple homes into smart homes.
Virtual tours enabled potential renters to see homes but smart home technology lets renters lead their own tours in real life. Starting with smart access control and a centralized control center, homes can be entered once permission is granted. “By integrating technology, one leasing agent can probably oversee two or three single-family rental communities,” continued Barnes. “Leasing agents at a clubhouse can now engage with six or more people at the same time and route them to various interactions immediately instead of waiting in line etc. Prospective renter? Here’s a QR code.”
Like a hub and spoke model, agents are no longer limited to where they can travel in a day. Not only can agents be more efficient, but they can handle more work. This creates an opportunity for these neighborhoods to spend time on other aspects to attract and retain renters.
Continuing with staff
Beyond ongoing challenges with labor shortage, changing the number of people that need to be on site for leasing and maintenance creates new roles. “The whole thesis is no staff to light staff. Most neighborhoods in this country don’t have a leasing agent. There’s no office and there’s no security guard,” explained Lucas Haldeman, CEO of SmartRent. “It’s not a requirement to have staff. Instead of a leasing agent, you can have a community director that’s focusing on enhancing the community by creating events or other activities.”
These communities are strengthened through the same smart home technology that got the renters in the door. From shared wifi networks amongst homes and other community buildings to cameras, residents can feel safe and connected to their home and surroundings. “Ten years ago you would talk about cameras and someone would bring up George Orwell’s 1984. But now everyone has cameras and we’re proud of it,” stated Barnes. In the case of Ring, a technology in the SmartRent network, the neighborhood app is in itself an ecosystem that keeps residents informed and safe. The need for a permanent on-site security team has changed. And, as staffing requirements are now different than traditionally, those interested in more geographically diverse locations have the freedom to expand.
These locations include options further out from typical suburban locations or specific urban areas. While places like Tucson and Phoenix are hot in the single-family rental market, other places like Las Vegas, Charlotte, Dallas, and Atlanta are increasingly showing up on the radar. Technology that connects homes to agents, renters, and maintenance teams streamlines the rental process from start to end. And, with an increasing focus on community, the end is further from the start than before. Afterall, more rental homes today include kids and the appeal of staying in the same school system can be more than enough to extend a lease.
For those starting to build rental portfolios, removing the hindrance of proximity opens up a new world of opportunity. “You don’t have to be so hung up on geographic proximity to other communities. Once you remove the need to have so many people on site, you can be much more creative with where you’re buying,” said Haldeman. Once a team is operating on the same foundational technology system, scaling up is much easier than before. Instead of just buying single-family rental homes, investors are buying neighborhoods. If that’s not proof of scale through technology, what is?