Property Management Perspective
June 1, 2020
Founder, Capstone Realty Professionals
Leading into 2020 we had exceptionally high hopes for our property management business. As I write this, we have just entered our second month collecting rents after COVID made its debut on the Arizona economy. It seems our previous way of running our property management business in the valley is over. So how has it really impacted property management in Phoenix and what does it look like moving forward?
Well for starters, for those of you whose businesses and teams were able to make working remotely from home easy, bravo. The transition for us has been a struggle and has been a true test of our ability to improve our systems and processes quickly and efficiently. In addition, our team thrives in our office. The positive culture we have created in the office helps balance out some of the negative aspects that come with the day-to-day of management. I know quite a few people in the property management world and one thing I can say with confidence is we didn’t get into property management because we are easily foiled or because we thought it would be simple. We are problem solvers and I like to think that most of my counterparts in the industry, like myself and team, will come out of this stronger and better than ever. New technology has changed the way we did business even as recent as last month and I expect this will continue.
Since the pandemic began, I have seen the property management industry band together and work as a collective now, more than ever. We are being forced to tread a very thin line. Early interpretation of how Executive Order 2020-14 would affect our ability to request payment of those with hardship vs the processing of evictions of those attempting to game the system was a challenge. I’d be lying if I said it didn’t keep me up at night at least a few times. Working with others to solve the new challenges and answer new questions we face has been extremely helpful.
How has it impacted day to day management? For starters, it has made us value and respect our tenant, owner and vendor relationships even more. In late March we rolled out a plan to current tenants based on Executive Order 2020-14 which granted postponement of evictions to tenants demonstrating loss due to the COVID pandemic. It went over surprisingly well with the tenants. What we weren’t ready for was the overwhelmingly positive response from our owners willing and wanting to do more to help and assist where they could. Our communication with both owners and tenants has improved and changed dramatically. We began doing weekly video updates, including a version geared toward owners, and one for tenants. It kept us more in front of them and helped humanize the experience we are all going through.
Showing properties has obviously had to change as well, and where once we were open to showing occupied properties, we now have to take a more cautious approach to ensure we do our best to keep everyone healthy. Virtual showings and using more technology has become the norm in only two months of dealing with COVID.
One negative impact that we saw immediately due to COVID was the change in tenant pool. A definitive shift from tenants relocating out of want or desire to a tenant moving out of necessity was apparent right away. Let’s face it, who wants to move in the middle of a pandemic? Applications went up, the time to review them as well, and we had to begin the reeducation of our clients to ensure they understood why their vacant properties were sitting on the market longer. The numbers tell a very different story than what we were experiencing in the trenches.
In addition, showing of occupied properties had to stop as we are not in the business of jeopardizing the health and safety of our tenants and prospects. We also decided to halt all “selective surgeries” on our properties. Though we did assure tenants that they still have the ability to put in work requests, but recognizing that not all will be corrected in the time they are accustomed.
If there’s one thing that this COVID pandemic has taught us, it’s that we have to be ready for anything, be prepared to pivot, and make the hard decisions quickly. What is going to happen moving forward? We’ve had to make some adjustments, almost all for the better, and I expect our clients, tenants and vendors will appreciate the changes in the long-term. I’d expect that with historically low interest rates and a consistently low supply of resale properties in the Phoenix metro, it will continue to keep our area a hot spot for buying and investing in real estate. The numbers still make sense and as long as that continues, so will the investor’s desire to buy and invest in Phoenix.