2014 Rental Outlook: Why Your Business Should Be Booming | Webinar with Nikesh Parekh, VP of New Ventures, Trulia
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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!
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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
- 7. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews 2. 3. 4. 1. economic trends demographic changes technology recommendations
- 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
- 10. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews Construction Returning & Urbanization 2014will be the highestnumberof completedmulti-family propertiessince1999 150 155 170 200 155 157 140 125 100 95 96 100 110 140 100 45 75 125 160 0 50 100 150 200 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Units(000’s)
- 11. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews Construction Returning & Urbanization 2014will be the highestnumberof completedmulti-family propertiessince1999 70% in Top 50 Metros -2012
- 12. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews 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
- 13. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews 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.
- 14. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews 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.
- 15. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews Perfect Storm for Rentals
- 16. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews16 1. One Word… Demographics
- 17. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews How is the rental consumer changing? demographic changes2.
- 18. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews 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
- 19. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews 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).
- 20. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews Approaching Echo Boom 40% of the housing market 90% will be renters
- 21. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews 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.
- 23. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews Is home ownership a safe investment? Scar Tissue from Housing Crisis
- 24. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews New Household Formation and Hispanics (Decrease of 700k of non-Hispanic White households) Over 1 million Hispanichouseholdswereformed in 2012
- 25. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews Low Cost, Low Tax From East & West To Center & South
- 26. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews What else is happening? Technology3.
- 27. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews 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
- 28. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews Mobile Internet Growing Faster ThanAny Other Technology
- 29. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews The Future is Mobile
- 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
- 33. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews 2. Must-Have – Online Tools Owner portal Online leasing Online payments Website Resident portals Inspections And more… SCALABLEonline tools
- 34. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews 2. Get Mobile
- 35. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews 3. Apps are Growing Apprageous!
- 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.
- 39. #AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews Thank You For Joining Us!
Editor's Notes
- 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.