How A Modernized Property Management Approach Helps Investors And Residents
Updated: Nov 19, 2020
We have a big problem in America, and it’s time for Corporate America, Silicon Valley and the real estate community to do something about it. The bottom half of Americans combined have a negative net worth, according to Business Insider. In other words, half of working Americans owe more in debt than the assets that they own. Further, 43% of American households can’t afford "a monthly budget that includes housing, food, child care, health care, transportation and a cell phone," according to a study by the United Way Alice Project (reported on by CNN). This wealth disparity between the haves and have-nots is unhealthy for individuals, the economy and society. We must do something about it.
It has been widely theorized that real estate is the greatest wealth-creation vehicle in U.S. history. Consistently, millionaires have created their personal wealth by building portfolios of cash-flowing investment properties. This is true for many reasons, including the tax benefits, easy access to debt financing, the tangibility of the asset class and the fact that it’s less volatile than the stock market. Unfortunately, it’s still quite difficult for most Americans to invest in this asset class.
The goal of real estate innovators should be to democratize real estate investing for everyone who wants to acquire properties. My firm is doing its part among the group of real estate companies seeking this revolution by making it easy for individuals all over the world to invest in real estate, regardless of their socioeconomic status or geographic location.
Making Real Estate More Accessible Through Tech Disruption
Over the past decade, Silicon Valley has been working on improving global access to real estate investing via the proptech sector, an entirely new sector of the economy. Not only is proptech disrupting the real estate investment and property management sectors, but it is enabling online investing. With properties located in high-yielding rental markets in metro areas nationwide, we can now provide portals that empower everyday Americans to invest in the best small residential real estate at affordable prices. Small residential real estate includes multifamily properties with 49 units or fewer, as well as all single-family rental (SFR) homes. Small residential comprises 87% of the entire real estate sector in the U.S., but in my view, not enough resources are available to support this sector.
There are many reasons why it’s hard to invest in residential real estate, especially small residential. One needs sufficient capital, although less than most people think. In some single-family rental markets, first-time investors only need as little as $10,000 to get started, as well as knowledge of the best geographic location to invest, which property to buy and how to manage it to get the desired returns. A number of tech-enabled companies are looking to disrupt the small residential real estate sector by launching innovative technology products. For instance, my firm is among those offering residents a completely digital leasing experience, owners the ability to virtually track an asset's performance and buyers a home valuation tool. Another substantial proptech development has been the proliferation of crowdfunding platforms. These platforms allow investors to collectively pool their money and invest in a portion of a real estate project, often with little money down.
Raising The Bar To Help Real Estate Investors
Property managers, real estate brokers, title agents and lending brokers are not typically known for a high degree of professionalism or strong ethics, nor are they known for taking a modern approach to their business. But, we can overcome this by leaning into the ability to provide a modernized service through technology, including data transparency to owners.
Raising The Bar To Help Residents
Residents are the reason we in the property management business do what we do. Without their need for shelter and support of our business by paying rent, we would have nothing. The residents and prospective residents make the communities in which we all work better. They are active members of the community who hold jobs in the area, create tax revenues, and patronize local restaurants and other businesses. It’s our duty to provide them with the highest level of service possible by making timely repairs, ensuring ongoing maintenance of their homes, and delivering technology that simplifies their leasing process.
Delivering a modern rental living experience that helps real estate investors build wealth through real estate investing ultimately improves local communities. If property managers can provide investors with a modernized platform full of data and insights, and residents with happy homes and full service, we can bridge the gap between the haves and have-nots. Let’s work together to make this become a reality. Original articles by Forbes here