Command the Competition
The successes of the SFR and BTR markets are clear. With numerous market drivers fueling these sectors as golden opportunities within the real estate industry, many are looking for how to stay ahead within SFR and BTR Markets. But it’s important to note that just tapping into a hot market won’t bring success. The SFR and BTR markets are full of fierce competition. Whether you’re new to the space or a seasoned player looking to up your game, you can’t rely on the status quo. There are always ways to elevate your processes. Without an optimized setup and proper tools, poor operation efficiency will eventually drag you down. By seeking to leverage technology and updating your processes, you take the first step towards achieving a competitive advantage.
Investor and Property Manager Needs
Both property managers and investors within the SFR and BTR spaces are looking to centralize data, provide necessary reporting and gain insight into the industry through analytics. All of these efforts are aimed at optimizing respective business procedures.
This doesn’t mean that investors and property managers have the same needs. Some needs are role-specific and change depending on whether you’re a property manager or an investor. For example, on the BTR investment side, companies are raising capital to buy up land and communities. You have real estate management companies partnering with developers to develop all-inclusive BTR communities with amenities like what you’d see in a large apartment development. On the other hand, with the SFR investment side, companies are looking to acquire both properties and smaller companies to increase the number of homes in their portfolios.
Acquisition activity within this space is like a game of speed chess. Each property acquisition is like a strategic move on the chessboard. Your pawns are the tools that you have in place to make the right decision. Your opponents’ pieces are the assets up for grabs. The problem is if you wait too long to decide your next move, you’ll miss out and your opponent will gain the advantage. You must be able to make quick, informed decisions about the playfield to gain an advantage and outmaneuver your competition.
Ultimately, the chess game that is acquisition activity within the SFR space is one that you cannot avoid. It is the driver of momentum within the industry. The game of acquisition activity in the SFR space is a constant battle for control and power. Without leveraging the right technology, you position yourself to fight an uphill battle in terms of the game of acquisition activity.
As an investor, you need to be certain that the asset you’re planning to acquire is valued correctly. This holds true whether you’re looking at a home, portfolio of homes or another company. The pre-acquisition stage, also known as due diligence, is where existing and future technology needs related to the asset are assessed. Once the transaction occurs, you have to manage your data properly. It is imperative to not only capture your operational and financial data, but to also use it effectively. Data can be difficult to capture cleanly, which makes it even harder to manage it in a way that’s useful for your business. It doesn’t have to be a struggle. When you leverage technology, you can clearly see the value of your data, manage it and ultimately be able to comprehend how to capitalize on its advantages.
Leverage Technology for Your Success
Whether you’re a smaller competitor or a big player looking to grow in the SFR or BTR markets, you need to use everything in your power to get and stay ahead. Utilizing technology is a great way to refresh your operational processes and gain insights from your data to make your next move. Here are four ways you need to leverage technology to stay ahead of the competition:
1. Property due diligence: If you’re still relying on Excel to support the acquisition process, you’re already losing the race of advancing within the SFR/BTR markets. Relying on Excel is like driving through thick fog; you have to slow your processes down while struggling to keep up with all of your critical dates. Filling out multiple excel sheets and duplicating your data for reporting is a waste of time. Instead of manually searching through a mountain of information or documents, your time could be better spent elsewhere. With the help of newer technology, you can speed up your processes. By leveraging the right technology during due diligence, you can automate the processes of importing and consolidating data, so you have the right information at your fingertips. Then, you’re equipped to make critical decisions in less time and with more confidence.
2. Property Onboarding: Continuing to use multiple spreadsheets to upload a single property into your property management system is like asking for a headache. Valuable time and energy is spent by manually managing property onboarding processes. Instead, you can choose to leverage updated technology. Avoid painstaking processes by capturing your needed data in the acquisition stage, automatically pushing the datapoints you need into your property management system. Technology can simplify this once complicated process so you can quickly onboard new properties and stay ahead of your competitors’ outdated procedures.
3. Yardi modules: Of course using Yardi offers a technological advantage, but are you leveraging it to its full extent? Yardi gives those in the SFR/BTR space two choices: to use their Multifamily Residential module or their Single-Family module. It’s important to note that some Yardi module add-ons were designed for their Multifamily module rather than the Single-Family module. Since Yardi’s Multifamily Residential module came before its Single- Family counterpart, the functionality of some add-on pieces needs to be explored. Your company’s ownership structure will determine which Yardi module is the best fit for you. As far as industry trends, many build-to-rent communities are being built out and managed like apartment communities. If this sounds like your portfolio, Yardi’s Multifamily Residential module will be easier to manage. Consider what you need before committing to either the Multifamily or Single-Family module, so you can ensure you are leveraging the industry’s available technology to its fullest extent.
4. Reporting: Reporting is crucial to your success in the SFR/BTR markets. Why rely on outdated manual procedures when your success is on the line? Instead of working out of multiple systems such as Excel to correlate your data, leverage technology through reporting processes to pull all your data into a centralized platform. By using a data warehouse with a reporting engine on top, you can centralize your data from Yardi and other systems, so your data is easily accessible when it’s time to create reports. By centralizing your data, you can drastically cut down the time that creating reports takes so that you have more time to allocate elsewhere.
Closing the Tech Gap and Gaining an Advantage
Right now, competition between companies within the SFR and BTR space is getting more sophisticated, meaning it is more difficult to make crucial decisions that support your investment model and ultimately your success.
At the moment, you have the big companies, and you have everyone else. The bigger players in the SFR and BTR markets are leveraging technology, analytics and reporting to their advantage. This gives them the ability to make quicker moves to fuel their growth. It’s clear this must be the case or access to capital will be limited.
Investing in technology and data solutions, ensuring a smooth due diligence process, and streamlining property onboarding is the quickest way to close the gap for developing SFR and BTR players.
If you’re a company that’s just getting established in this space, then you’re going to have to decide whether to make the investment in technology and operations to compete. Even if you’re an acquisition target, you’re going to have to have certain technology and reporting tools in place. If not, you’ll be discounted quickly.
Technology is also the key to accomplishing the biggest goal of all in BTR and SFR: Every company, regardless of their size, is laser-focused on matching their inventory with people who want to rent. Connecting those two dots as quickly and as seamlessly as possible is the single biggest goal in the industry.
Why Saxony Partners for SFR and BTR Support
The expertise of our team makes Saxony Partners so adept at providing the best possible support. It’s critical to have a partner you can trust to provide the right solutions at the right time, especially in the competitive area of SFR and BTR.
Every consultant on our team comes from the real estate industry. We know the ins and outs of the industry because we’ve been there too. Learn more about the services we offer by visiting our Saxony Partners blog or by following us on LinkedIn.