This is a guest post from Onerent Property Management, who offer the first contactless rental experience to help homeowners manage and monetize residential rental properties in the cloud.
Ever since COVID-19 gained a foothold in the U.S. in early 2020, the pandemic has forced us to rethink how we do our basic daily tasks. Grocery shopping and ordering takeout have now suddenly become an exercise in researching local guidelines for what is, or is not, open, and what delivery method reduces risk to your health and safety.
Real estate and rental property investing are no exception to this as even replacing a lightbulb in a tenant’s apartment suddenly becomes an ordeal. Additional planning and work are required to maintain social distancing, sanitize surfaces, and ensure a safe working environment in a tenant’s home.
With the pandemic also came a new set of issues for landlords: people working from home, tenants unemployment, and major shifts in housing supply and demand in both renter and buyer markets. Here are some key observations we at Onerent see arising as the real estate industry settles into a new normal, and how contactless rental property management will rise in popularity post-COVID.
Remote Work Affects Where We Live
As COVID-19 spread across the U.S., large groups of the population suddenly began working remotely from home. People who are fortunate enough to work remotely during this time are spending nearly all of their time at home nowadays. Along with that, as shelter-in-place orders across the country stretched from weeks into months and employers told their staff to stay home, many of those people realized they could continue doing their work from anywhere.
People began looking to move out of the high cost-of-living urban areas like San Francisco and New York, and into less expensive suburbs or rural areas. The potential cost-savings are enormous for those people who are only living in cities for work. According to job-search database Hired, when asked what they would do if told to work from home permanently, 42% of San Francisco Bay Area tech workers said they would move to a lower cost-of-living area to save money.
Social Distancing Guidelines for Real Estate Professionals
With more people moving, that means that you, the landlord, may need to start looking for new renters or change your tenant placement strategy while maintaining social distance safety. Challenges with local regulations on social distancing measures and essential services all vary based on what state or even what county you’re in. For example, the State of California issued guidance on what are considered essential services and included “residential and commercial real estate workers” as essential workers. This allowed for scheduled property viewings, but not open houses with large groups of interested parties.
State guidance also stated that whenever possible, showings should be done virtually instead of in-person to minimize person-to-person contact. Of course, with that exception came additional CDC guidelines to be followed in order to remain open for business, such as routine cleaning and disinfecting of high-touch surfaces. Finally, if local guidelines conflict (say between state and county regulations), the order that is more strict must be followed.
Challenges with Eviction Moratoriums
When the pandemic first struck, federal and state governments issued moratoriums on evicting tenants affected by COVID-19 from a property. While the federal moratorium has expired by this point, it’s now an issue of state and local governments issuing possible extensions. Take California as an example again, Governor Newsom recently extended authorization for local governments to “halt evictions for renters impacted by the COVID-19 pandemic” through September 30, 2020. This may pose a challenge to evict a delinquent renter, but there are a few things that you can do to make sure you’re able to pay your bills on the property.
Regardless of the moratoriums, evictions are never fun. They can become long, time-consuming processes for everyone involved, and it’s much better to try and ensure from the start that anyone interested in renting from you will be able to pay rent regularly and on time. That means better screening processes and seamless payment options become more important than ever.
Contactless Rentals Is The Solution
In a post-COVID world, video conferencing is the new norm, cashless and touchless payment is preferred, and extended in-person contact is minimized for everyone’s safety. This is where Contactless Rentals becomes incredibly powerful for rental property investing. At Onerent Property Management, we found Contactless Rentals achieve three main objectives:
- Virtual Tours: Rather than take the risk of showing the unit to someone, a virtual 3D tour can replace the need for an in-person one, and help to get a new tenant in as soon as possible. We received over 3,000 virtual showings per month and leased properties 25% faster with 3D Virtual Tours.
- Contactless Payments: Rather than meet up to exchange a security deposit and wait for a paper check to clear, online payments using ACH, PayPal, or Zelle (to name a few) are all fast, simple, and secure.
- Digital Maintenance and Management: Troubleshooting a problem in the property or conducting a move-out inspection can largely be done via video call. Right up until something needs to be physically fixed, everything leading up to that can be done virtually to ensure a faster and safer experience for everyone. We have seen a 30% increase in productivity through automated online maintenance and management
Similar to how banking and stock trading has gone completely digital, the real estate industry will see a similar pivot. Investors need to understand the future is moving online. Investors and landlords who struggle to modernize their business will struggle to remain profitable. Either adapt or die.
Up and Coming Markets Post-COVID
The pandemic has turned everything on its head, including new markets to invest in. Mortgage interest rates are currently low, and they’re contributing to a 21% spike in home sales.
Redfin recently published the results of their house search data and revealed these top 5 most searched cities to buy a home in the U.S. in 2020:
- Tampa, FL
- Las Vegas, NV
- Boston, MA
- Seattle, WA
- San Jose, CA
Many people are itching to move out of their cramped apartments into something with more space, leading to a renewed desire to leave the crowded metropolitan areas for the spacious suburbs and rural areas. Second tier cities that were previously overlooked have now gained renewed interest. As a property owner and landlord, these factors are worth keeping in mind if you’re looking for the next city to make your rental property investment.
With all the changes happening in the world due to COVID-19, it’s no surprise that rental property investing is simply another industry that needs to adapt to the new circumstances. In a post-COVID world, Onerent’s Contactless Rentals makes that possible both for renters looking to move to a new city and landlords looking to rent out their property. The technology for safe renting is there. The tools for modern rental property management is available. The choice to use these contactless rental methods is up to you.
Onerent Property Management
Onerent Property Management offers the first contactless rental experience to help homeowners manage and monetize residential rental properties in the cloud. Its full-stack service manages both the online and offline parts of rentals. Onerent is backed by the Chief of AI at Google and manages $1.4B in properties across 7 major metros in California, Washington, and Colorado.