Michael Knight, VP of Operations for Better World Properties LLC and Terri Clifton, President of Better World Properties LLC share some video
insights from the 2018 TAA Educational Conference and Lone Star Expo in San Antonio.
Better World Properties and 5,000 multifamily industry friends from across the state of Texas gathered in San Antonio to boot scoot, sample some of the best Texas barbecue and find out What’s Next in the Texas apartment industry at the 2018 TAA Educational Conference and Lone Star Expo.
Better World’s Top Ten Takeaways:
- Texas remains a national leader in the multifamily industry. As Texas goes, so goes much of the industry. Investors across the country and across the world remain bullish on Texas apartments.
- Talk among peers says that the overexuberance in student housing is beginning to cool off in certain Texas market areas.
- The apartment industry continues to provide fertile ground for personal and professional growth. For the second year in a row, a former Leasing Agent has been installed as TAA president. This year, we welcomed Traci Hall as the new president of the Texas Apartment Association. There are significant opportunities for new talent to enter the Texas multifamily industry and the TAA Educational Foundation is actively promoting career opportunities.
- Concerns over affordable housing may be overblown. The free market in Texas continues to work well. The Texas economy is doing well. Minimum wage is rising, as is the population of Texas. How does the saying go? “I may not have been born in Texas, but I got here as fast as I could.” Tax and immigration law changes are creating more disposable income for Texas. There is a need for affordable housing and it seems to be being met There is also a need and desire by renters willing and able to pay more for upgraded apartments and desirable amenities across all classes of properties in Texas.
- Can you hear me now? Everything from apartment searches to leases to rent payment have gone mobile. While older renters appreciate human relationships and in person affirmations when making renting decisions, data continues to show that younger renters more and more are relying on social proof when making renting decisions. It’s important to keep everyone in all age groups happy.
- The Internet of Things (IoT) is the shiny new parade of objects. The IoT is a network of devices including home devices (thermostats, lighting controls, locks, etc.), digital devices (Alexa, Google Home), cars, and appliances that connect to the internet and exchange information with the internet. While these may be fun and applicable in certain Class A properties, comprehensive solutions and real ROI remain elusive. Don’t beam us yet, Scotty.
- Rising interest rates may change some dynamics in the apartment industry, but there is no significant fear that the anticipated small rates increases will cause problems. Good apartment property operators make money in all interest rate environments. There is increasing appreciation for the cyclical nature of the industry by all players and all are incentivized to narrow the gap between peaks and valleys. Data that supports smoothing these transitions is getting more rich and transparent. Artificial intelligence, machine learning and blockchain technology will become more apparent.
- Is it time to sell? We are seeing an uptick in interested sellers. Smart buyers are investing in professional due diligence and smart sellers are investing in professional pre-sale staging and marketing to maximize profits.
- Private lenders used to remain on the lending side of the table. Increasingly, lenders are becoming more actively involved in property operations. If lenders are not educated in operations and this process is not managed properly, costs can increase rapidly. Some lenders are requiring extensive reporting on frivolous details, not allowing for dynamic adjustments or adding unreasonable costs including multiple layers of redundant inspections all adding to bottom line costs. Other lenders are pushing for management fee reductions while ignoring significant add-ons in other areas. There is danger that if left unchallenged in this unregulated sector, lending costs may rise to unsustainable levels or, worse yet, become predatory, of which we have seen both ends of this spectrum in the marketplace as of late. The Texas multifamily industry recognizes this potential problem area and more focus is needed to protect all parties.
- Renters have shown consistently that the quality, personality, friendliness and competence of on-site staff is extremely important to the quality of life in their apartment community. Hire the best and pay them well.
There is a lot going on in the Texas apartment world. And, we are more excited than ever! Do you need apartment management, process improvement, and multifamily financing solutions all under one roof? You can read more about our services here.
Are you interested in growing your existing apartment portfolio? If you do not have Texas apartments yet, are you ready to join successful Texas apartment investors? Give us a call. We love to talk apartments. Better yet, come visit. Bring your hat and your boots. We’ll take you on a Lone Star tour.