Rentals Are Outpacing Home Sales As Interest Rates Rise and Inventories Fall
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As the real estate market shifts and borrowing costs increase, more people opt to rent rather than buy a home. But with this rent surge, property management companies have their hands complete. Enter the magic of automation! Automation can streamline the rental process, taking some of the workloads off the shoulders of property managers. But how? Let's get into it.
Renting is Outpacing Home Sales
With interest rates on the rise and the pickings slim for those in the market for a new home, rentals are booming. For example, in 2022, Chicago's rent growth outpaced the national rate several times over, with rents increasing by 20.8% year over year compared with 3.4% for the nation as a whole. And we see similar trends happening in other big cities like Boston and New York.
In other words, we're experiencing a housing slump, and rental demand will remain strong as long as mortgage expenses continue to price many people out of buying. At the same time, many people who own a home are reluctant to sell in such an uncertain market. This means that even renters in a position to buy might need something more suitable on the market.
This continually evolving rental market is also having an impact on property management companies. Property management companies are busier than ever with the rental market surging and need help keeping up. Here's where automation comes in.
How Can Automation Help Property Management Companies Amid Rental Market Chaos?
More renters mean more work for property management companies across almost every aspect of the rental process, including tenant onboarding, accounting, document processing, data entry, and portfolio management.
For example, let's consider some financial operations property management companies have to deal with, like rent management. Rent income is the backbone of property management; the company can't function without it. However, while managing rent income is crucial, it's also time-consuming and error-prone.
Every hour employees spend manually processing rent checks is the time taken away from more innovative tasks that help the business reach its goals. Moreover, every human error incurs additional expenses for the company. Luckily, RPA real estate bots can handle much of the work here. For example, bots can take rent income posting, rent deposit reconciliation, and even use Optical Character Recognition to read rent checks.
Also, on the financial side, automation technology can handle accounts payable (AP) processes like AP invoice entry and invoice payment.
But what about document processing and data entry? Automation excels here too. Real estate is no stranger to paperwork as a traditional and highly regulated industry. Think lease agreements, co-signer agreements, rental inspection reports, disclosure statements, and non-renewal notices. And then, there are move-in/move-out inspection documents at the start and end of each tenancy, requests and approvals for property maintenance, and more.
RPA streamlines the collection, processing, and organization of information, no matter the format. Physical documents can be efficiently processed with OCR, and digital records can be easily extracted and organized for immediate use or future reference. Bots can also send automated reminders to tenants or potential tenants if documents need to be included or on time. These bots can even regularly scan internal IT systems to search for missing information that may cause problems in the future.
Automation can also help with crucial portfolio management tasks, like ensuring that property details are consistent across platforms. For example, a rental property goes from "available" to "filled." This information needs to be updated in internal systems, website, and external-facing interfaces. Bots can do this automatically, ensuring potential renters aren't wasting time on outdated listings and workers aren't getting needless calls about properties that are no longer available during a period when they're already worked off their feet.
By leveraging RPA, workers are freed from spending time on dull, tedious work that, while necessary, tends to drive down job satisfaction. Instead, they can spend time on tasks that add value to the property management company, like fostering more robust relationships with tenants, designing creative marketing campaigns, and more.
Those are some specific use cases for RPA in real estate, but many more exist. Essentially, RPA bots can help with tasks involving high-volume, repetitive, rules-based work with a high probability of error.
Property management companies are facing sky-high workloads, with the rental market only expected to grow this year. Luckily, automation is here to help. Picture this: employees spending their time on creative problem-solving instead of reading through stacks of rent checks. Or imagine no more mistakes and no more lost money to human error. Automation can make all that a reality!
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January 9, 2024