We hosted a fantastic webinar called ‘2014 Rental Outlook: Why Your Business Should Be Booming,’ featuring Nikesh Parekh, VP of New Ventures, Trulia. Nikesh is a great speaker and he had a ton of valuable information on about trends trends, market predictions, and best practices that are key to boosting your business and staying ahead of the curve. The market outlook and stats presented here may surprise you––property management professionals won't want to miss this presentation!
Factors to Consider When Choosing Accounts Payable Services Providers.pptx
2014 Rental Outlook: Why Your Business Should Be Booming | Webinar with Nikesh Parekh, VP of New Ventures, Trulia
1. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
2014 Rental Outlook: Why Your Business
Should Be Booming
2. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
AppFolio
Complete Solution Includes:
Web-BasedPropertyManagementSoftware
• Property management and accounting
• Online rent collection (free)
• Prospect / guest card tracking
• Marketing
• Website
• Payment processing
• Online applications
• Resident Screening
So You Run A More Successful Business
3. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
Trulia
~50
million users
8
top rated apps
1 = 1
a lead every second
51%
earn over $75K
4. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
Polling Question
Who am I?
A. New property manager
B. Veteran property manager
C. Real estate agent doing rentals
D. Real estate agent
E. Landlord
5. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
Polling Question
What’s my biggestconcerntoday?
A. How to deal with economic trends
B. How to deal with demographic changes
C. How to deal with psychological factors
D. How to deal with finding owners
6. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
Nikesh (Niki) Parekh
• VP of New Ventures, Trulia
• Rentals
• Mortgage
• New Construction
• EVP, Product, Market Leader
• CEO, ActiveRain
• VP, HouseValues
8. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
economic trends
Price gains starting to level off, but
recovery climbing unevenly.
1.
9. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
Housing Drives the Recovery
2.3%
MISSING
GDP
7%
6%
5%
4%
3%
2%
1%
0%
1980 1990 2000 2010 2013
GDP
RESIDENTIAL INVESTMENT AS A PERCENTAGE OF GDP
$350
BILLION
2.9
MILLION
JOBS
500K
NEW
HOUSE-
HOLDS/
YEAR
11. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
Construction Returning & Urbanization
2014will be the highestnumberof completedmulti-family
propertiessince1999
70% in
Top 50
Metros
-2012
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0
100
200
300
400
500
0
400
800
1,200
1,600
2,000
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Source: Census new residential construction report, including starts purpose of construction: http://www.census.gov/construction/nrc/historical _data.
Construction Lags / Apartment Starts Boom
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The KidsAre FINALLY Moving Out…
18-34 year-olds withoutjobs or homes
20%
24%
28%
32%
36%
'00 '02 '04 '06 '08 '10 '12
Not Employed
Living with Parents
Sources: Trulia analysis from raw data in CPS-ASEC survey: American Social and Economic Supplement, aka the “March supplement”, a joint product of the Bureau of Labor Statistics and Census.
Raw data available through IPUMS-CPS: https://cps.ipums.org/cps.
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Causing Rents To Rise
Where do 2-bedroom rental prices cost more than 60% of a
typical paycheck?
Affordabilityis a Concern
• Miami, FL (62%)
• New York, NY (62%)
• Los Angeles, CA (54%)
• San Francisco, CA (51%)
• Oakland, CA (46%)
• Boston, MA (43%)
• Chicago, IL (37%)
• Dallas, TX (30%)
4.5%
national increase in
rental prices year-over-
year.
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How is the rental consumer changing?
demographic changes2.
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Approaching Echo Boom
Prime years of renting forAmerica’slargestpopulation
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-79
“Millennials”
• 67MM people ages 20 to 34
“Boomers”
• 74MM people ages 51 to 69
Age Pyramid
Male Female
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Baby BoomersAre Moving Out Too
12% of properties constructed in
2012 were age-restricted
(8% in 2010).
52% of seniors between the ages of
65 and 80 who had recently
moved became renters (US Dept.
of Housing and Urban
Development).
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Approaching Echo Boom
40% of the housing market
90% will be renters
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25% are
unemployed
26% are
married
before 32
(48% boomers)
55%
have
shared a
“selfie”
(9% boomers)
22. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
Asset-Lite Mentality
“Peter Pan Syndrome”
• Don’t want to grow up
• Don’t want commitment
Debt!!!
• 25% increase in school debt
since 2008
Sharing Economy
• Many are opting to share or
rent with roommates.
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Is home ownership a safe investment?
Scar Tissue from Housing Crisis
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New Household Formation and Hispanics
(Decrease of 700k of non-Hispanic White households)
Over 1 million Hispanichouseholdswereformed in 2012
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Low Cost,
Low Tax
From East &
West
To
Center &
South
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Mary Meeker
• Partner at KPCB
• Morgan Stanley analyst
• First to cover Internet
companies like Amazon,
Google & Yahoo
http://www.kpcb.com/insights/2014-internet-trends
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Mobile Internet Growing Faster ThanAny Other
Technology
30. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
Mobile Uprise
Asset-LiteMentality
66% of
trulia
traffic is
mobile
62% view
other listing
during a
tour
83% of
millennials
sleep with
their phone
41% of
Americans
have a
social
profile
31. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
How can you take advantage
of the changes?
recommendations4.
32. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
1. Pricing Management Software
Quit calling the property next door. With all the economic
changes in supply and demand, a good pricing tool will enhance
your portfolio valuation.
Attract new propertyownersby incorporatingrevenue
managementsoftware
36. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
4. Diversify into Property Management
NAR reports that 10% of real estate
broker are focusing on property
management
Why?
• Accounts can be sold ($1,000 - 3,000,
depending on the market)
• Fees can range from 6 to 10 percent of rent,
plus leasing fees
• Stable income
• Access to seller and investor inventory
2003
-
2007
2012
-
2013
4%
10%
Real Estate Agents
Focusing on PM
37. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
5. Renters Become First Time Home Buyers
% of renters planningto buy a home in the nexttwo years
31%Nov 2012
28%May 2012
22%Jan 2011
38. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
6. Owners Become Investors
Repeat buyers with cash are dominating the for-sale market.
Renters are remaining renters.
Impact for For-SaleAgents
32% increase in single-family rental homes from 2005 to 2012.
Trend is now cooling down as investors sell properties to
home owners.
Sources:
Census new residential construction report, including starts purpose of construction: http://www.census.gov/construction/nrc/historical_data/
SF – room to grow; HH formation ramping up, and vacancies coming down
Sources:
Trulia analysis from raw data in CPS-ASEC survey: American Social and Economic Supplement, aka the “March supplement”, a joint product of the Bureau of Labor Statistics and Census. Raw data available through IPUMS-CPS: https://cps.ipums.org/cps/
Talk more to this – START with employment, THEN living with parents
18-34!!!!!
The bigger thing holding back housing is simply demand. Fewer people can or want to fulfill the American dream of starting a household of their own.
It may yet prove to be temporary, but for now at least, millions more people are doubling up with roommates, living at home with parents and otherwise finding ways to avoid doing the one thing that would get the housing economy back to normal: buying a home.
According to data from the U.S. Department of Housing and Urban Development, 52 percent of seniors between the ages of 65 and 80 who had recently moved became renters after moving
Non-Hispanic households only increased by 1%.
What Do These Trends Mean For You???
Economic Trends (i.e., Apartment Construction Boom and Urban Development) =
Greater ability to increase prices in top 50 metros. Demand is there and will take awhile for construction to catch up.
Demographic Trends (i.e., 52% of seniors that move are becoming renters, highest number of millenials entering market) =
Marketing mixed-use properties for millennials highlighting flexibility, entertainment, and fun.
Website should match that brand both in technology (roommates, online payments, utility billing, apps!, etc.) and design.
List where consumers search most. Consumers use an average of 11 sites.
Seniors require more touch. Build trust.
Psychological Trends (i.e., Asset-light mentality, scared from housing crisis, quick decision making)
Property managers are more prepared than distant owners to address these concerns with consumers.
What Do These Trends Mean For You???
Economic Trends (i.e., Apartment Construction Boom and Urban Development) =
Greater ability to increase prices in top 50 metros. Demand is there and will take awhile for construction to catch up.
Demographic Trends (i.e., 52% of seniors that move are becoming renters, highest number of millenials entering market) =
Marketing mixed-use properties for millennials highlighting flexibility, entertainment, and fun.
Website should match that brand both in technology (roommates, online payments, utility billing, apps!, etc.) and design.
List where consumers search most. Consumers use an average of 11 sites.
Seniors require more touch. Build trust.
Psychological Trends (i.e., Asset-light mentality, scared from housing crisis, quick decision making)
Property managers are more prepared than distant owners to address these concerns with consumers.