The Power of Accurate Market Evaluation for Property Managers: A Valuable Asset for InvestorsJun 07, 2023
In the dynamic world of property management, accurate market evaluation is more than just a tool - it's a strategic advantage that can significantly impact the success of investment properties. Property managers equipped with the ability to conduct precise market analyses bring immense value to investors. Throughout my 16 years in the real estate industry I have always prided myself on market evaluations. With so many automated tools like Zillow's "Zestimate" feature it seems like many PM's have lost the skills to perform accurate in-depth market analysis. Instead they rely heavily on 3rd party evaluation tools and AI software to tell them what the "Market" will handle. The fundamental flaw in this way of thinking is forgetting that the "market" is controlled by the consumer. Just because an AI can find supporting evidence to claim a unit is "valued" at one price certainly doesn't mean consumers will happily fill that vacancy. The highest quality residents in each market are savvy consumers, and are aware of the value they bring to the table. The best residents in area demand more benefits and at the best value. With this in mind, it is becoming more and more valuable to accurately evaluate market conditions and what the best residents in your market are looking for!
Setting the Right Rental Prices
One of the key benefits of accurate market evaluation for property managers is the ability to set the right rental prices. Properly pricing a rental unit is a delicate balance that requires considering various factors, such as location, property condition, amenities, and market demand. Market experts have the knowledge and experience to analyze comparable properties, recent leasing trends, and local market conditions to determine an optimal rental price that attracts tenants while maximizing investment returns. This ensures that the property is competitively priced, neither leaving money on the table nor deterring potential residents. One of the more interesting examples where market experts seem to always have the edge are in transitional neighborhoods. Whether the area is transitioning from a "B-Class" to an "A-Class" or from a "D-Class" to a "C-Class," market experts know the blocks and streets that separate each market value. I have seen markets in transition that have a 30% market value range from one street to another. This is where predictive radius models seem to fall short and create volatile market conditions.
Attracting High-Quality Residents
Accurate market evaluation goes beyond setting the right rental prices; it also helps property managers attract high-quality residents. By thoroughly researching the market and understanding resident preferences, market experts can position a property in a way that appeals to the target demographic. They identify key selling points, such as proximity to amenities, transportation, schools, or desirable neighborhood characteristics, and leverage this knowledge to market the property effectively. With a well-defined target resident profile, property managers can ensure their marketing efforts align with the needs and desires of potential residents, ultimately attracting individuals who are more likely to pay rent on time, take care of the property, and abide by the lease terms.
Maximizing Occupancy Rates
Accurate market evaluation plays a crucial role in maximizing occupancy rates for rental properties. Property managers who possess in-depth knowledge of the local market can identify demand patterns and adjust their strategies accordingly. By understanding peak rental seasons, market trends, and potential supply and demand imbalances, market experts can proactively plan marketing campaigns, pricing adjustments, and lease terms to minimize vacancies and keep the property occupied. This not only ensures a consistent rental income stream for investors but also reduces the costs associated with prolonged vacancies and turnovers.
Navigating Market Fluctuations
Investment property markets are not static; they are subject to fluctuations and changing dynamics. Accurate market evaluation equips property managers with the ability to navigate these fluctuations successfully. Market experts continuously monitor market conditions, such as rental trends, economic indicators, and regulatory changes, to make informed decisions on behalf of investors. By staying ahead of market shifts, property managers can adapt rental strategies, negotiate lease terms, and anticipate changes in resident demand. This proactive approach enables investors to mitigate risks and optimize their investment performance, even in a changing market landscape.
Accurate market evaluation is an invaluable asset for property managers and a significant advantage for investors. By setting the right rental prices, attracting high-quality tenants, maximizing occupancy rates, and navigating market fluctuations, market experts prove their worth in the competitive property management industry. Investors who find these market experts should recognize their expertise and hold onto them tightly, as they play a crucial role in optimizing the financial success and long-term growth of investment properties.
Curious about the potential of your market? We are offering complimentary market analysis to our prospective partners for a limited time; schedule an exploratory call with our team to learn more!
Author: Experience Officer
It is intriguing to observe that numerous property management owners are often unaware of the abundant opportunities that surround them. Many become so fixated on the doors already under their competitors' management that they lose sight of what truly matters. So, what exactly is the major opportunity? Is it about luring away a prospect, or perhaps securing one that nobody else knew existed?
During my tenure as a Business Development Manager turned Sales Director, I was able to break into over 75 cities in the field of property management. These achievements, which I later realized were far ahead of the status quo for a 23 year old, were primarily the result of uncovering hidden deals. And now that I have ventured into helping a multitude of entrepreneurs simultaneously break into thousands more cities, our partners expand their territories with ease. It's worth noting that my deep-rooted faith has often guided me along less-traveled paths. Achieving such a high number of successful deals wasn't something I fully comprehended until years later. I mention this with humility, recognizing that I was willing to do what others wouldn't—to defy convention and take risks. This required a leap of blind faith, trusting that if I sought, I would find the doors that God had opened for me to close.
Hence, when I emphasize the value of knowing the opportunities available to you, it is a sincere statement. Consider this: even if Joe manages 50-2000 properties in your market, it is irrelevant if you remain unaware of critical information. This includes understanding the number of renters in your market, the volume of investors looking to buy or sell, and the count of homeowners willing to rent instead of parting ways with their beloved homes. By comparing these figures with what is currently under management, you can grasp the importance of staying informed.
If you are unsure about evaluating your market, we can assist you. For a limited time, we are offering complimentary market analyses. Don't miss this opportunity—reach out to us and find out how we can help you make informed decisions on growth and retention.