For nearly two years, almost every sector has been affected by the COVID pandemic, including multifamily. Remote working changed renter preferences, and eviction moratoriums were brought in. With what is hopefully the worst of the pandemic behind us, what does 2022 have in store for the US rental market?
What to expect in 2022
Following discussions with multifamily and SFR leaders about what to expect in 2022, the general consensus is “more of the same.” Many agree that rental rate trends in multifamily over the last three years compared to 2018, when smoothed or normalized, are at least on par with pre-COVID expectations, if not better.
At the same time, SFR has enjoyed a period of consistent increases in most metrics. As always, these results varied significantly by market, asset class, and migratory trends of the customer base. But with continued inflation, persistent labor shortages, increased construction costs, and uncertainty around the pandemic’s course, where can you find the best opportunities to ensure excellent performance?
Increase PropTech investments
Technology in the property management and development sectors will continue to be at the forefront in 2022. The ability to retain your existing residents, identify your future customers, the need to streamline internal processes and the necessity to be less reliant on labor in all its forms (and therefore reduce payroll) are all key to a successful year.
AI and machine learning solutions can increase your organization’s operational efficiency and help improve decision-making. With the increased investment and adoption of PropTech and the competitive edge that it provides, many organizations cannot afford to ignore this area of opportunity.
Record-breaking retention numbers have been recorded in many markets nationwide in the last two years. Renewals account for up to 60% of all transactions and top-line revenue. Yet, the industry continues to spend inordinately less time and energy on renewals than it does on new resident acquisition.
The continued shortage of qualified associates to manage, analyze and implement renewal processes poses a great risk. But an opportunity also beckons.
Understanding your resident base and identifying who has a greater propensity to renew or move out (Stickiness Factor) will become a necessary tool to maintain occupancy, increasingly grow revenues and reduce costs.
Greater rate acceptance, maintaining or improving retention, lowering turn costs and vacancy loss, and easing the pressure of onsite staffing shortages can all be significantly enhanced with a better understanding at a granular level of residents’ future behavior.
Platforms such as Beekin provide an AI-powered, cost-effective way to understand your customers. Resident-centric solutions such as LeaseMax and WILSON help you price new leases and renewals better and predict which of your residents are likely to renew. With powerful tools such as these, you can reduce vacancies and drive higher NOI.
ESG (Environmental, Social, Governance)
ESG is not simply the buzzword of the day on Wall Street. There is mounting pressure on developers and operators alike to have a more energy-efficient footprint, be more socially responsible, and improve corporate governance practices.
Investors, including privately-funded ones, are increasingly looking at these factors as part and parcel of their overall strategy. The ability to measure one’s ESG rank amongst peers will gain greater momentum in 2022. ESG provides a significant opportunity to garner more of the funds invested in rental properties while improving your organization’s stature and reputation in the court of public opinion.
PRESI is our solution for measuring the ‘S’ in ESG. Our platform utilizes affordability, income, and resident engagement data to provide a property-level social impact score, with a higher PRESI score directly correlating with higher resident retention.
How to capitalize on these opportunities in 2022
To help your organization make the most of these opportunities in 2022, book a demo of Beekin’s platform by clicking here.
Here is to a great 2022!