Here is what the experts have to say about the new technologies turning the rental housing industry on its head.
Technology in the rental housing industry is seeing its biggest boom in 15 years. During the late 1990s and early 2000s, the industry experienced an onslaught of game-changing tech such as automated credit screening, pricing and revenue management (PRM), Web-based Property Management Systems (PMS), and resident/prospect portals.
The following years saw, at most, minor advancements in process through technology, but that is clearly changing. While it is not yet certain exactly how they will play out, technologies such as artificial intelligence (AI) and machine learning, smart-home devices, and short-term rental (STR) marketplaces will clearly have a major impact in how we do business — a much bigger impact than the technology that emerged in the past two decades.
Interviews with 20 COOs and CIOs revealed how technology might affect the industry in the coming years.
One big project
Half of interviewees said a technology project in 2018 dominated resources nearly to the exclusion of any other major project, and 70 percent of those projects were either a transition to a new PMS or a major upgrade to their existing PMS.
These infrastructure investments only pay off if they are followed by significant projects that build on top of that infrastructure.
The key topics presented at NMHC’s OpTech Conference in November included AI, smart-home platforms, and STR technologies. Yet none of the COOs or CIOs interviewed listed any of those among their top three priorities for 2019.
That doesn’t mean they have no interest in these technologies but it does mean the rental housing industry hasn’t yet caught up to the hype.
Recruiting and retaining talent
Interviewees all said recruiting and retaining quality talent had become increasingly difficult, and they expected it to become even more so the following year.
Most of those interviewed stated they were focusing on company culture and policies, including changes like loosening tattoo and piercing standards to attract a wider talent pool. Greater investment in talent development and training is another key strategy, and interviewees are prioritizing sales performance improvement.
Improved sales capabilities are a wise investment for executives looking ahead to possible slowdowns, especially after years of stability in a rapidly changing industry.
Several interviewees mentioned Business Intelligence (BI) projects as a key area of focus though few were completely satisfied with their results to date.
The adoption cycle for BI has differed from other technologies in which early innovators spent years getting just a handful of customers before hitting a tipping point of rapid adoption.
In contrast, BI is following a slow, steady pace of adoption with no rapid increase and seems to be equally led by fee managers as by owner-operators.
Candidly, most BI projects are not set up for success. They tend to be IT-led and/or report-centric rather than business-led and focused on dashboarding and predictive analytics. A company driven by analytics is highly recommended.
PRM turns 18
When asking executives what they thought was missing in PRM, CIOs said they haven’t been involved in PRM for years and COOs struggled to articulate any driving needs.
It’s concerning that executives have become complacent about PRM. Other industries, such as hospitality, are constantly refining pricing and revenue models and processes. In the rental housing industry there are certainly opportunities to improve upon lease-up pricing, unit amenity evaluation, renovation return analysis, and associate training.