Should You Be Playing Offense or Defense in 2023?
Property management entrepreneurs and operators are facing lots of predictions about real estate and finance in the new year. The macroeconomic side of things is currently in a tailspin, with big companies like Amazon and Salesforce laying off thousands of employees. Economic uncertainty is still high going into the new year, and the real estate market faces lingering high mortgage rates and slower home sales from 2022.
The economy will inevitably bounce back. It always does. But what does it all mean for property management? What should you be thinking about? Should you plan to play offense or defense this year?
Things are about to get good
First, understand that it’s a great time to be a property manager. This year is likely to see a return to normalcy with stabilizing mortgage rates and home prices. You may have been on the defensive last year, dealing with a lot of churn and sell-off and trying to protect your base. A defensive posture was necessary in 2022.
But now, those winds are at your back. More people are trying to sell their homes but they’re price-anchored to what they thought they would get for them a year ago. So, they’re renting out their properties in the meantime before everything starts leveling out in their favor.
This is great news for property managers. Now’s not the time to stay stagnant. Get more aggressive and double down on investments. Property managers should be pressing the gas pedal.
There’s also a nice sweet spot happening – the market is what it is but people are still making money right now and can afford to live where they want. There’s enough stability in the market, even with the uncertainty that’s coming in from last year. People are in positions to meet their basic needs.
Even if it gets worse, housing is a core, fundamental need. Where else would you rather be than the property management game? Remember that the industry is pretty resilient.
Jordan Muela, cofounder of RentScale, is the CEO of LeadSimple and has over a decade of experience in helping property managers grow. From co-authoring the NARPM Accounting Standards to hosting the Profitable Property Management Podcast, Jordan keeps his finger on the pulse of the industry and is uniquely positioned to speak to what drives growth in the residential property management industry.