From a property management standpoint, Covid-19 has introduced four major impacts to my business:
1. New staffing model - we have divided our property teams into two block shifts to create staffing distancing and separation. The intent behind this idea was to give everyone lower exposure to one another, and to prevent an entire property team from needing to quarantine and by doing so leaving no team members to look after their respective property if that were to happen. Teams are still getting full weekly hours (which included 10 hours/week training/assignments from home), so this is by no means a cost savings strategy.
2. Virtual Leasing - we have completely transitioned to virtual leasing, using a combination of existing marketing assets (professional property photography, videos, and 360 tours) while rolling out a best practice program for our staff to utilize mobile devices (pads and phones) to create available unit specific tours. In addition, staff are also encouraged to conduct live virtual tours via scheduled video calls with prospects.
3. Introduction of rent deferment payment plans - we have quickly shifted to allowing residents experiencing hardship to enter into a rent deferment payment plan, giving them the opportunity to spread their amount due in April to future months as they navigate unanticipated financial hardship.
4. Loss of revenue - combined with the payment plans, we are seeing a spike in skip/lease break activity as residents are forced to make sudden and unexpected life decisions. A number of these include moving out of the city/state.
Future outlook - from my viewpoint, the severity of the impact on the management side of the business hinges almost entirely on how long the government requires stay at home/shelter in place. The longer this mandate is in place, the greater the ripple effect. Leasing traffic and velocity is approximately 10% of typical levels, which at this time of the year in the Seattle are trending upwards toward the seasonal highs that we experience in May/June. Rents are frozen in place and in a number of cases declining to create an occupancy buffer to hedge against unexpected skip/lease break/income shortfalls. With this in mind, I think best case scenario is that our rental market plateaus for the remainder of the year as we re-stabilize which is a huge departure from the 5-6% rent growth previously forecast for our market in 2020.
On the positive side, the industry has been forced to depend on virtual leasing which is already yielding surprisingly positive results. This was an area of innovation that the industry was slowly starting to adopt but I wouldn't say was considered best practice. I think the creativity and availability for prospects to see available homes on demand will ultimately create a higher level of service for future residents as they weight their options, and will also likely lead to gains in staffing cost efficiencies for owners. Additionally I believe this will allow management companies a greater opportunity to centralize some of their leasing activity workflow as a larger percentage of leasing traffic shifts to an online touring model.