Embracing Digital Transformation for a Seamless Renter Experience
Digital transformation revolutionizes the renter experience, making the process easier and more efficient.
Bryan Woods, co-founder of Rhino, explains how digital transformation reshapes the rental market, making the process easier and more efficient for landlords and tenants. Landlords must embrace technology to stay competitive in the tech-driven rental market.
Renters want digital solutions. In 2022, rental portal usage climbed 321% above historical norms, while electronic payment transactions soared 463% higher, according to MRI’s 2022 Software Market Analysis report. The real estate and property management sector is beginning to catch up with the digital functions of other industries, but it must accelerate its digital transformation.
The rental market in the United States has reached its highest point in 50 years, with almost 44 million households residing in single-family and multifamily rentals. According to RentCafe, renters outnumber homeowners in 41% of zip codes within the 50 largest US cities. This trend highlights the growing demand for rental properties and the need for efficient and effective solutions to manage them.
Property owners must differentiate themselves due to the growing number of multifamily housing units. Technology allows property owners to elevate themselves above the competition when implemented and used strategically.
Nearly everything we do as individuals is digital, from scheduling appointments to shopping to paying utilities. So why would renting a house or apartment be any different? Landlords still conduct the same manual checks they did on renters in the 1970s, creating bottlenecks and requiring significant effort from renters and property managers. The system is ripe for disruption.
Why Has Digital Transformation Been Slow?
Change can be overwhelming and requires time, energy, and money. Property managers and owners have invested significantly in their legacy systems, which get the job done even when it’s not the most efficient process. Many follow the adage: If it ain’t broken, don’t fix it.
Real estate software is frequently outdated and not user-friendly, but it’s what managers have always used. Flashy solutions that don’t deliver on their promises have burned many landlords, giving them even more pause on digital transformation decisions. According to Deloitte, just 45% of real estate companies have planned to accelerate their efforts to leverage technology and tools to redefine their processes. Sticking with what you know is less risky than trying something new.
This hesitancy is logical, but in the end, it will hurt landlords. Consumers have clarified that antiquated and inefficient processes won’t cut it in this fast-paced world. Real estate companies can position themselves for long-term success in an increasingly tech-driven industry by embracing digital transformation. Let’s explore how digital transformation changes renting for the better.
What Would Digital Transformation in the rental Process Look Like?
What is the primary benefit of implementing technology? To make the entire rental process easier and more efficient. Consider these use cases.
1. Application processes
The traditional application process requires a lot of paperwork and is time and labor-intensive. Renters must fill out personal information and consent forms, provide pay stub printouts, pay a security deposit and other fees, and secure proof of renter’s insurance just to start the process. Landlords and property managers then review all the paperwork, run the credit check, call for employment verification, and complete many other administrative tasks. All this work can create approval delays, especially during high-volume periods.
Technology automates and simplifies many application aspects. For example, a digital document repository would allow renters to upload information for landlords without filling out dozens of forms. An AI-powered system can categorize and sort information for easy access and updates. Plus, no one has to worry about losing documents because they are stored in the cloud, not in many different physical folders.
A streamlined, self-service process makes renting more accessible to everyone.
2. Payments
Managing payments, especially security deposits, involves many escrows and government regulations, making it complex and challenging for property managers with many other tasks to accomplish. Technology can provide an end-to-end platform that eases the administrative burden. Renters can pay online, and landlords can easily monitor deposits while the software manages compliance.
Deposit insurance is another rental process innovation. Typically, you must pay thousands in security deposits upfront. This requirement presents significant hardships for many and even makes renting unattainable for otherwise qualified individuals. With deposit insurance, renters pay a small monthly fee instead of a large one-time payment. It also protects landlords against damages. Realistically, the industry could eventually phase out lump-sum payments, making things easier for both sides.
Technology also enables property managers to offer additional rent payment options, such as online credit card payments or smaller installments throughout the month rather than the traditional lump-sum payment. These options build stronger relationships with residents.
See More: How to Bring New Innovations To The Payments Sector
3. Community experience
Consumers are accustomed to using self-service options — they’ve become a necessity, not an amenity. End-to-end proptech platforms store payments, maintenance requests, documents, and more in a single location for easy access, removing friction from many rental functions. Residents receive a seamless rental experience, and property managers benefit from streamlined workflows facilitating better operational efficiency.
Dashboards eliminate physical checks and manual reporting so property managers can spend more time on higher-level tasks, like strategizing approaches to enhance community offerings and improve resident satisfaction. With technology’s data-driven insights, owners can optimize costs, amenities, and marketing. Eventually, data from rental platforms may be able to predict demand, turnover, and other factors to aid in business planning.
See More: Community Marketing: How to Build an Engaged Community
For residents, renting means more than having a place to eat, sleep and keep their stuff. It’s where their lives happen. They’re making memories with families and friends, overcoming challenges, and achieving new goals. Property managers and owners should look beyond the business to see the people renting their properties. Customer-centric behavior generates high renter satisfaction and attracts new prospects.
As the newest generation enters the rental market and the 65+ age group continues to grow – with 1 in 5, Americans expected to be a part of it by 2030 – the rental market is set to undergo significant changes in the coming years. To remain competitive in the short and long term, rental property owners must invest in amenities and modern leasing methods that are important to these groups.
Technology helps satisfy renters’ needs, providing options and amenities necessary to build fulfilling lives. The pandemic spurred some innovation, but the real estate industry has more potential to ease the burden for renters, managers, and owners. Digital transformation is a victory for everyone.
What actions have you taken to elevate your rental business and provide a seamless experience for your tenants? Let us know on Facebook, Twitter, and LinkedIn. We’d love to hear from you!
Image Source: Shutterstock
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