Chart courtesy of Buildium
Property managers have to deal with three kinds of rental housing owners, from the regular investor to the accidental landlord – and a third type, according to Buildium’s 2020 Rental Owners’ Report.
Buildium surveyed more than 600 rental owners across the country “to better understand the motivations and pressures that drive their decisions, as well as the expectations that they have of property managers. We put it all in the context of our research on the property-management industry and the rental market to help property managers turn insights into action,” the report says.
The report says the recent seller’s market in properties means there has been a change in the type of owner seeking property management. Also the number of “intentional investors” is now “55 percent of rental owners in 2019, an increase 39 percent since 2018.”
3 kinds of rental housing owners
Accidental landlords have been selling, the report says, and are being replaced by the intention investors and a third kind of owner.
“As home prices have begun to recede from the peaks they’ve reached over the last two years, interest is growing among a new generation of investors. Property managers will benefit from an ability to prove their value to not only the accidental landlords and intentional investors they’ve served in the past, but also to a new group of DIY landlords tempted to manage their rentals with apps,” Buildium says in the report.
Here are the 3 kinds of rental housing owners:
- Intentional Investors bought a rental property as an investment. These are about 55 percent of the rental housing owners.
- Accidental landlords “fell into rental-property ownership due to circumstance.” These types generally do not plan to buy additional properties. They represent about 30 percent of owners.
- Unintentional investors “fell into rental-property ownership due to circumstance” and then added additional rental-housing properties. These are about 16 percent of owners, the report says.
How to deal with rental owners’ stress points, goals
“Finding a property manager and working with them is a consistent source of stress for rental owners, illustrating the importance of providing excellent customer service from the very first interaction,” the report says.
Maintenance is listed as the most stressful aspect of owning rental housing by the owners in the survey, followed by finding a property manager and filling vacancies.
Three out of four owners “agree that reliability and trustworthiness are the most important qualities a property manager can have,” the report says.
The Buildium report also had a number of quotes from owners offering advice on how best to deal with them.
- “Be a quick communicator, be thorough, and follow up when the owner reaches out. Trust can be broken, but if fostered, can build a great portfolio and relationship.”
- “Show in dollars how a property manager will save me money over doing it myself.”
- “Stay on top of market conditions to understand rent and vacancy rates. Be prepared to inspect the houses regularly to ensure they’re being cared for properly. Keep accurate financial records for cash flow and tax purposes.”
- “Make my property inviting to good tenants, and keep them there with good service.”