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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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#AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
2014 Rental Outlook: Why Your Business Should Be Booming
#AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
AppFolio
Complete Solution Includes:
Web-Based Property Management Software
•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
#AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
Trulia
~50million users
8 top rated apps
1 = 1a lead every second
51%earn over $75K
#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
#AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
Polling Question
What’s my biggest concern today?
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
#AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
Nikesh (Niki) Parekh
• VP of New Ventures, Trulia
• Rentals
• Mortgage
• New Construction
• EVP, Product, Market Leader
• CEO, ActiveRain
• VP, HouseValues
#AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews
2.
3.
4.
1. economic trends
demographic changes
technology
recommendations
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economic trends
Price gains starting to level off, but recovery climbing unevenly.
1.
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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
$350BILLION
2.9MILLION
JOBS
500KNEW
HOUSE-HOLDS/YEAR
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Construction Returning & Urbanization
2014 will be the highest number of completed multi-family properties since 1999
19961997199819992000200120022003200420052006200720082009201020112012201320140
50
100
150
200
150 155
170
200
155 157
140
125
100 95 96 100110
140
100
45
75
125
160
Uni
ts (0
00’s)
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Construction Returning & Urbanization
2014 will be the highest number of completed multi-family properties since 1999
70% in Top 50Metros
-2012
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'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '120
400
800
1,200
1,600
2,000
0
100
200
300
400
500
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 Kids Are FINALLY Moving Out…
18-34 year-olds without jobs or homes
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '1320%
24%
28%
32%
36%
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?
Affordability is 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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Perfect Storm for Rentals
#AppFolioChat | @AppFolio | @TruliaRentals |@InmanNews16
1. One Word…
Demographics
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How is the rental consumer changing?
demographic changes2.
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Approaching Echo Boom
Prime years of renting for America’s largest population
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 Boomers Are 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)
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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
Foreclosure
DEBT
BankruptcyShort Sale
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New Household Formation and Hispanics
(Decrease of 700k of non-Hispanic White households)
Over 1 million Hispanic households were formed in 2012
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Low Cost, Low Tax
From East & West
To Center &
South
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What else is happening?
Technology3.
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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 Than Any Other Technology
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The Future is Mobile
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Mobile Uprise
Asset-Lite Mentality
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
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How can you take advantage of the changes?
recommendations4.
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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 property owners by incorporating revenue management software
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2. Must-Have – Online Tools
Owner portalOnline leasingOnline paymentsWebsiteResident portalsInspectionsAnd more…
SCALABLE online tools
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2. Get Mobile
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3. Apps are Growing
Apprageous!
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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
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5. Renters Become First Time Home Buyers
% of renters planning to buy a home in the next two years
31%Nov 2012
28%May 2012
22%Jan 2011
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6. Owners Become Investors
Repeat buyers with cash are dominating the for-sale market. Renters are remaining renters.
Impact for For-Sale Agents
32% increase in single-family rental homes from 2005 to 2012. Trend is now cooling down as investors sell properties to home owners.
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Thank You For Joining Us!