Make no mistakes about it: the world has gone digital. Digital transformation accelerated by 7 years during the pandemic, and the tech takeover shows no signs of slowing down. Global spending on digital transformation hit a whopping $1.3 trillion in 2020 and is tipped to reach $3.4 trillion by 2026. The best part? Innovative solutions aren’t just for the eCommerce companies among us. They’re taking property management by storm, too. 🌪️
In this article, we’ll explain why many property management companies are taking the digital transformation leap. And, to kickstart your tech makeover, we’ll highlight some key business areas to optimize and tools to use. Finally, we’ll share tips and tricks for making your digital transformation successful. Let’s dive in!
Table of contents
- What started the digital revolution in property management?
- How to drive property management efficiency with digital tools
- Championing digital transformation in property management the right way
Starting your payment digital transformation journey? Hitch a smooth ride with Flex.
What started the digital revolution in property management?
It’s no secret that technology in real estate and property management has lagged behind other industries. For the longest time, manual tools like spreadsheets, checks, and basic accounting software were as high-tech as things got.
But now, you’ve probably noticed a shift to tech-powered solutions and processes. You’re on to something. 61% of real estate companies have embraced technology, with a third adopting one to two solutions. So, what’s caused this switch to digital solutions? Let’s take a closer look:
- Increasing expectations from residents: Glued to screens and increasingly busy, more people are turning to digital tools to make their lives easier. The trend peaked during the pandemic and continues today. Following this evolution, residents are more tech-savvy than ever and want digital tools from their landlords. 27% of people believe it’s become more critical since COVID-19 for property managers to offer flexible payment plans. 28% hold the same sentiment on offering tech solutions to manage rentals. Embracing digital transformation allows you to serve residents how they expect, and flexible payments are a great place to start.
- Higher profits for landlords and property management firms: “Money talks,” as the saying goes. Yet, 31% of property managers say profitability is a top concern. Knowing this, it’s hard to ignore the cost savings digitalization brings, making it an even more attractive move. To give an idea of the cash on the table, here are three eye-opening stats:
- Onboarding an accounting software slashes invoice processing costs by around 80%
- Digital frontrunners have earnings growth that’s 1.8X higher than digital laggards🤑
- Easier data management and analysis to fuel decision-making: When using manual tools and physical documents, siloed data is inevitable. So, it’s easy to miss out on opportunities like engaging tenants due for contract renewals and contacting warm leads. This flaw can drastically impact your rental income growth and bottom line. Thankfully, technology can track and organize insights so you stay on top form.
- Operational cost savings and efficiency: Inefficiencies like manually chasing payments and processing cost your business big time. The right digital solutions allow your business to become more streamlined and profitable. Take Sage Ventures, for example. The onsite team now saves 5 hours per week per Assistant Manager using Flex, a rent payments app. Flex allows users to split their rent into two manageable portions and pay on the go. Read more about Sage’s phenomenal transformation here.
Gain a competitive advantage and manage crises more effectively: With more than 326,000 property management businesses in the US alone, competition is stiff. More landlords are realizing the need to adopt tech solutions to get and stay ahead of their competition. Then there’s the crisis management aspect. In the past, property managers could get away with basic tools. However, the pandemic provided a wake-up call. Technology in real estate is essential to stay operational and keep rental income coming during disasters. Around 78% of property managers said they had to reconsider their tech strategy or need for new tools following the outbreak.
How to drive property management efficiency with digital tools
So, you’ve decided now’s the time to start your digital transformation. Great choice! But how do you do it? And what solutions will you need? Let’s cover some essential steps:
Get your mindset right 🧠
The sobering reality is that 70% of digital transformation journeys fail. But do you know a determining factor in the success of a digital transformation journey? Mindset. Here are some tips to keep your thoughts in top form:
- Lock in for the long haul. It can take up 3 years to see significant results
- Understand it’s going to be a ride full of twists and turns
- Get everyone onboard, including your residents
- Foster a collaborative culture
- Be ready to act and fail fast
- Make small moves over time rather than big one-off changes
- See each change as an experiment, not path-altering actions
- Establish a decision-making process
Build a robust strategy
Get this: 61% of property management businesses use technology, and just 28% have adopted multiple products. Also, 35% are still scoping out the market, and 4% haven’t begun strategizing how to apply the technology.
So, what are these property managers missing? A solid game plan to create a well-rounded tech stack. How you design your framework will depend on your business size and needs. But to gain some perspective, let’s say you’re a mom-and-pop style landlord. Your strategy should have five stages:
- Goal setting and research
- Solution sourcing
- Implementation
- Evaluation
- Optimization
In practice, this game plan could look like this:
- Decide you want to increase on-time payments by 30% in 6 months
- Look for tools to meet this target and fit your target customers’ needs
- Trial the solution in one business area
- Roll out the tool(s) to core accounts in your business
- Gather data and tweak processes accordingly
Top tips:💡For best results, give each phase a timeline. Also, include a buffer to stay on track when unexpected challenges arise.
Identify high-impact areas and solutions to jumpstart your optimization
During the goal-setting and research phase, you’ve got two make-or-break tasks. First, uncover the business areas that’ll benefit most from digital transformation. Then, prioritize finding tools that’ll give you the most bang for your buck. In property management, some top areas to explore include:
Flexible payments
We’re on our phones and laptops more than ever, using tech to tackle mundane daily tasks. So much so that 67% of people have paid a bill online via mobile.🤳Combine this fact with the harsh financial climate many face, and it’s easy to see why digital and flexible payment solutions are a must-have. So, offer solutions that embody the tech-driven future, like Flex. Here’s why:
✔️Flex guarantees rental income to landlords on the 1st of every month
✔️Residents get access to a rent payments app for mobile
✔️Residents can split rent payments into two manageable parts
✔️Tenants and property managers can manage payments on the go
✔️Flex has nominal fees for the user and at no extra cost to the landlord
✔️In case of default, Flex takes over the recovery process, making it risk-free for the operator
Property management
Even if you’re managing one property, a comprehensive property management solution can pay huge dividends in time and money saved. They’ll allow you to quickly execute tasks like qualifying tenants, managing leases, and arranging inspections. You’ll also be able to automate admin work like form filling, paying bills, and customer support. Check out solutions from companies like Appfolio, Mews, Rentec Direct, Entrata, and Buildium.
Tenant experience
Resident experience solutions improve the quality of stay at your property. Various tools fall into this category. We’re talking chatbots, live chat, ticketing tools, and online portals to manage maintenance and concierge. Tailor your choices to your resident profile for the best adoption and satisfaction rates. For instance, say you have millennials and Gen Xers as your primary resident base. You could use tools like Slack and Zoom to communicate and customer support via social media like Instagram, Facebook, and WhatsApp.
Data analytics and system automation
Riches lie in your data. So, it’s essential to utilize the insights flowing into your business. Look for tools that store and organize data, analyze trends, and access the latest market research. Combine these solutions with tech that turns manual tasks into hands-free processes. Tools like auto-responders with pre-built scenarios, auto-filling, and automated onboarding sequences are a great place to start. Companies like RealPage, Segment, Propertyware, Innago, Condo Control, CoreLogic, and DoorLoop can help.
Sales and marketing
Having a constant flow of leads is critical to keep the rental income rolling in. Look for solutions that make marketing your properties a breeze at every stage (the tool gets extra brownie points if it has integration capabilities). For example, advertising to prospective renters, generating qualified leads, and tracking campaigns. This could look like online marketplaces, automated outreach tools, online 3D tours and showrooms, and DIY call booking tools. To start, check out software from ApartmentList, Zumper, Lemlist, Woodpecker, Matterport, Real Tour Vision, Calendly, and Doodle.
Optimize, optimize, optimize
By this point, you’ve handpicked and road-tested some solutions; nice work!👌 Now, it’s time to further up-level operations and processes. This can be using the tools you’ve implemented and integrating new ones. For instance, say you have successfully onboarded a flexible payment solution. Next, consider how to upgrade payments for things like association fees and tax collection. Similarly, if you’ve rolled out a flexible payment solution to 1 business area and it was a hit, think of ways to use the solution elsewhere.
That’s what Sage Ventures did. Using Flex, they successfully gave rent collection a tech makeover in 2 business areas. Sage then expanded Flex across its portfolio and saw delinquencies drop. The company has processed $2.2M in rent payments since July 2023 through Flex alone. Read more about Sage’s inspiring journey with Flex here.
Championing digital transformation in property management the right way
Believe the hype, technology in real estate is here to stay and has gone from a “nice to have” to essential for success. But if the leap into tech-powered property management seems daunting, don’t fret. Your best bet is to find solutions that overhaul rigid payment options, take the fuss out of managing properties, and make life easier for residents.
But remember, the digital transformation journey never ends. So work with reputable providers, use comprehensive solutions, and continuously improve your strategy. From higher customer satisfaction and property management efficiency to operational cost savings and larger profits; there’s so much to gain. So start today, and soon, your business will be a force in property management.
Digital transformation is creating property management winners. Learn how Flex can help you join the ranks.
